India's largest fuel marketing company Indian Oil Corporation (IOC) on Monday posted a 29.7% year-on-year decline in net profit at Rs 3,905.2 crore for the fourth quarter ended March against Rs 5,556.8 crore a year ago.
High under-recoveries on domestic sales of diesel, cooking gas and kerosene were mainly responsible for the fall in the company's net profit, said RS Butola, CMD, IOC.
Total income for the quarter rose to Rs 99,202.7 crore compared to Rs 79,106.4 crore in the same period last year.
For the fiscal year ended March 2011, the company reported a net profit of Rs 7,445.5 crore against Rs 10,220.6 crore last year.
The fuel retailer had to absorb R4,845.0 crore of loss on fuel sales during 2010-11 after accounting for cash subsidy from the government and assistance from upstream firms including ONGC and GAIL.
"There was Rs 3,803.0 crore of net under-recovery (revenue loss) on diesel, LPG and kerosene in 2010-11. Also, there was an under-recovery of about Rs 1,000.0 crore on petrol," said Butola.
The company is incurring a daily loss of R261.0 crore by selling these three products below the cost price. Diesel is being sold at a loss of Rs 14.7 per litre while losses incurred from the sale of cooking gas and kerosene stood at Rs 329.7 per cylinder and Rs 28.3 a litre respectively, Butola said.