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IOC posts net loss in Q4

NEW DELHI: Indicating a ‘major crisis’ in the offing, Indian Oil Corporation (IOC) on Wednesday said that if the Government does not act to hike the prices of petrol and diesel immediately, the country might witness queues outside petrol pumps due to anticipated shortages.

Addressing a press conference to announce the results that saw the company post a net loss for the fourth quarter of 2007-08, S. Behuria, Chairman, said the company was losing Rs. 300 crore a day on sale of petrol, diesel, LPG and kerosene. “Last fiscal, our net under-realisation rose to Rs. 9,774 crore from Rs. 2,190 crore in 2006-07,” he said.

The company will not be left with any cash to pay for crude oil imports by September-end if the fuel prices are not raised or duties not cut. “If the government does not act, we might see queues and shortages,” he told newsmen.

“Diesel demand is growing at 20-22 per cent, a rate that will necessitate IOC to import two million tonnes, but the company plans not to shell out international prices and would rather restrict supplies,” Mr. Behuria said.

“We will restrict supply to reasonable level,” he said, adding that the company could meet the relentless rise in demand. “The demand is rising because diesel is cheaper to burn as industrial fuel as compared to other liquid fuel,” he said.

Huge revenue loss on fuel sales, he said, was forcing the company to restrict petrol and diesel sales and put on hold future projects. IOC posted a net loss of Rs. 414.27 crore in the January-March quarter as against a net profit of Rs. 1,502.69 crore in the same period in the previous year. He said at one stage the company decided to sell premium or branded petrol and diesel in big cities by stopping supplies of cheaper normal fuel.

“The scheme has not been implemented to its fullest because of logistic issues. We do not have the ability to finance new projects. Our borrowings have risen to over Rs. 41,000 crore from Rs. 35,000 crore. We already have a debt-equity ratio of 1:1 and there is a limit up to which we can borrow,” he said.

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