Loss of IOC, HPCL, BPCL at Rs 2,749 crore in Q2; total loss in the first half reaches Rs 21,201 crore

State-owned oil marketing companies IOC, BPCL and HPCL posted a second consecutive quarterly loss totaling Rs 2,748.66 crore in July-September in one go. LPG the payment by the government could not hide the losses due to the freezing of petrol and diesel prices. According to the stock market statements of the three fuel distributors, the losses are due to the erosion of the commercial margin on gasoline, diesel and domestic LPG.

The losses would have been higher had it not been for the one-time government subsidy of Rs 22,000 crore paid to offset losses incurred from selling LPG cooking gas at below cost rates over the past two years. The losses were recorded despite a strong refining margin through the second quarter. Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), which are supposed to revise gasoline and diesel prices on a daily basis, have not changed their tariffs for seven consecutive months. .

Read also | CIO announces first-ever consecutive quarterly loss despite booking LPG grant received in October

IOC on October 29, reported a net loss of Rs 272.35 crore for the July-September quarter, which is explained by a loss of Rs 1,995.3 crore in the previous three months. November 3, HPLC reported a loss of Rs 2,172.14 crore in the second quarter of the current financial year, on the back of its highest ever quarterly loss of Rs 10,196.94 crore in April-June.

Read also | Modi cabinet approves Rs 22,000 crore one-time grant to PSU Oil cos Indian Oil, BPCL, HPCL for LPG losses

BPCL Monday posted a loss of Rs 304.17 crore in July-September, according to one company’s stock market record. In the first quarter, it recorded a loss of Rs 6,263.05 crore. when petrol and diesel prices were regulated and the government provided subsidies to the three retailers.

From July to September, IOC booked a grant of Rs 10,800 crore LPG received from the government after the end of the quarter, while HPCL booked Rs 5,617 crore. BPCL secured a one-time grant of Rs 5,582 crore. Oil Minister Hardeep Singh Puri had indicated last week that his ministry would seek help from the Ministry of Finance to cover losses suffered on the maintenance of petrol and diesel prices since the war in Ukraine in order to to help the government fight inflation.

“The OMCs (petroleum marketing companies) still have under-recoveries on diesel,” he told reporters Nov. 2 when asked if there was a price cut in sight due to the drop in international oil prices. Domestic retail rates were suspended at levels below the current international oil price of $97.75 a barrel.

The under-recovery – difference between the retail price and the international rate – is currently around Rs 27 per liter of diesel, but the actual cash loss (the loss based on the actual cost of supplying crude oil and its transformation into fuel) is around Rs 3-4 per litre. Puri said oil companies moderated prices during extreme volatility to help consumers.

When asked if his ministry would apply for financial aid along the lines of the LPG grant, Puri replied “categorically yes”. “The question is whether you will try and my answer is yes,” he said, declining to discuss the redress that will be sought. “The government has stopped the problem.” The losses recorded by the three companies in the first half compared to the record profits of the previous year.

The CIO’s April-September loss of Rs 2,264.88 crore compares to a profit of Rs 12,301.42 crore in the same period a year ago and Rs 24,184.10 crore during the 2021-22 financial year (April 2021 to March 2022). Similarly, BPCL’s loss of Rs 6,567.22 crore compares to a profit of Rs 6,033.82 crore in April-September 2021 and a profit of Rs 11,363.55 crore in 2021-22.

HPCL’s loss of Rs 12,369.08 crore in April-September is almost double the profit of Rs 6,282.63 crore it made in the 2021-22 financial year. In April-September 2021, it made a profit of Rs 3,718.51 crore. Gasoline and diesel prices are supposed to be revised daily, but state-owned fuel retailers have not exercised their rights since April 6. Fares have been frozen since then, except on May 22 when prices were reduced following an excise duty reduction. Prior to the April freeze, petrol and diesel prices had risen by 10 rupees per liter each. Petrol currently costs Rs 96.72 per liter in the nation’s capital and diesel is priced at Rs 89.62.

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