IOC, HPCL, BPCL loss at ₹2,749 cr in Q2; total loss in H1 reaches ₹21,201 cr


According to stock exchange filings by the three fuel retailers, the losses were due to decrease in the marketing margin on petrol, diesel and domestic LPG.

The losses would have been higher but for the 22,000 crore one-time government grant paid to make up for losses incurred on selling cooking gas LPG at rates below cost in the last two years.

Losses were despite robust refining margin extending into the second quarter.

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), which are supposed to revise petrol and diesel prices daily in line with cost, have not changed rates for record seven months in a row.

IOC on October 29 reported a net loss of 272.35 crore for the September quarter, which came on the back of 1,995.3 crore loss in the June quarter this fiscal.

On November 3, HPCL reported a loss of 2,172.14 crore in Q2, on the back of its highest-ever quarterly loss of 10,196.94 crore in April-June.

BPCL on Monday posted a loss of 304.17 crore in September, according to a company’s stock exchange filing. In the first quarter, it posted a loss of 6,263.05 crore.

The combined loss for the first half of the current fiscal year that began on April 1 now stands at 21,201.18 crore — the highest ever for any six-month period including the era when petrol and diesel prices were regulated and the government used to give subsidies to the three retailers.

During September quarter, IOC accounted for 10,800 crore LPG subsidy received from the government while HPCL booked 5,617 crore. BPCL got a 5,582 crore one-time grant.

Oil Minister Hardeep Singh Puri had last week indicated that his ministry will seek assistance from the finance ministry to cover the losses incurred on holding petrol and diesel prices since the Ukraine war to help the government fight inflation.

OMCs (oil marketing companies) still have under-recoveries on diesel,” he had told reporters on November 2 when asked if there is a price reduction in the offing in line with softening international oil prices.

Domestic retail rates were put on hold at levels which are lower than the current international oil price of USD 97.75 per barrel.

The under-recovery — difference between the retail selling price and the international rate — currently is about 27 per litre on diesel but the actual cash loss (the loss based on the actual cost of procurement of crude oil and turning it into fuel) is about 3-4 per litre.

Puri had said oil companies moderated prices during extreme volatility to help consumers.

Asked if his ministry will seek financial assistance on the lines of the LPG grant, Puri said, “emphatic yes.”

“The question is will you try for it and my answer is yes,” he said, refusing to discuss what relief will be sought. “The government is ceased of the issue.”

The losses the three firms have posted in the first half compared with record earnings in the previous year.

IOC’s April-September loss of 2,264.88 crore compares with 12,301.42 crore profit in the same period a year back and 24,184.10 crore in the full 2021-22 fiscal (April 2021 to March 2022).

Similarly, BPCL’s 6,567.22 crore loss compares with 6,033.82 crore profit in April-September 2021 and 11,363.55 crore profit in 2021-22.

HPCL’s 12,369.08 crore loss in April-September is almost double of the 6,282.63 crore profit it had earned in full 2021-22 fiscal. In April-September 2021 it had a profit of 3,718.51 crore.

Petrol and diesel prices are supposed to be revised daily but state-owned fuel retailers have not exercised their rights since April 6. Rates have been on freeze since then, except on May 22 when prices were reduced following a cut in excise duty.

Prior to the April freeze, petrol and diesel prices had gone up by 10 per litre each.

Petrol currently costs 96.72 a litre in the national capital and diesel is priced at 89.62.

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