Indian Oil Corporation (IOC) on Wednesday reported its worst-ever quarterly net loss of Rs7,486 crore for the July-September quarter due to mounting under-recoveries on fuel sales.
The company had reported a net profit of Rs5,294 crore in the year-ago period.
“This has been an unusual year that witnessed significant price upheaval and rupee depreciation, said RS Butola, chairman, IOC. “Never before have we witnessed this kind of quarterly losses.”IOC’s net loss was caused by the company having to absorb about Rs7,800 crore of losses on the fuel sales.
State-run oil firms sell diesel, domestic LPG and kerosene at government-controlled prices, which are way below the market rate. The government gives a cash subsidy equivalent to at least half the loss and the retailer absorbs the remaining under-recovery.
However, the government has not provided any cash subsidy to IOC for the second quarter. “We had a total under-recovery (revenue loss) of Rs11,757 crore on selling diesel, domestic LPG and kerosene below cost in the July-September quarter,” Butola said.