The government-owned Indian Oil Corporation (IOC) on Saturday reported a net loss of Rs 272.35 crore for the period of July to September, despite booking LPG subsidies totaling more than Rs 10,800 crore after the quarter ended.
The net loss of Rs 272.35 crore compares with a profit of Rs 6,360.05 crore in the period of July to September 2021, according to a business report filed with the stock exchanges.
The decline is due to an earlier quarter’s loss of Rs 1,992.53 crore in the months of April and June. IOC had never before incurred losses in successive quarters due to its practise of selling gasoline, diesel, and cooking gas (LPG) below cost.
The government announced a one-time gift of Rs 10,801 crore on October 12, but even after accounting for it, a deficit was still recorded in the second quarter of the current fiscal year.
To compensate three state-owned fuel retailers for the losses they experienced by selling household cooking gas LPG below cost for two years beginning in June 2020, the government on October They received a one-time donation from 12 totaling Rs 22,000 crore.
According to a representative, even though the government paid the subsidy after the quarter had ended, it was for the period up to September 2022, thus it was regarded as adhering to the idea of accrual-based accounting.
In the fiscal year 2021–2022 and the six months that concluded on September 20, 2022, the corporation had under-recovered from the sale of domestic LPG. The Government of India recently granted a one-time payout of Rs 10,801.00 crore to make up for under-recoveries. This grant has been reported in the financial results for the period of April to September 2022 under revenue from operations IOC stated in the document.
In order to assist the government in containing spiralling inflation, IOC and other state-owned fuel retailers faced huge losses in the first quarter of the current fiscal year but did not raise the price of gasoline, diesel, and cooking gas LPG.
The three companies, who are supposed to adjust gasoline and diesel prices every day by cost, haven’t altered prices for more than six and a half months already, marking the longest rate freeze since fuel pricing was deregulated.
IOC experienced a net loss of Rs 1,992.53 crore during the April through June fiscal quarter of 2022–23.
In comparison to a profit of Rs 12,301.42 crore during the same period last year, the company has now reported a net loss of Rs 2,264.88 crore for the first half of the current fiscal.
Despite a record-breaking refining profit of USD 25.49 per barrel from April to September, compared to USD 6.57 per barrel during the same time the previous year, this was the case.
The core gross refining margin (GRM), also known as the current price GRM for April through September 2022, is USD 22.19 per barrel after accounting for inventory loss or gain. The benefit of an increase in GRM, however, has been countered by the reduced marketing margins of several petroleum products said IOC.
Operating revenue climbed noticeably from Rs 1.69 lakh crore in July to Rs 2.28 lakh crore in September, according to the statement.
But from 1.24 million tonnes in the same time last year to 0.86 million tonnes in July-September, exports fell. This might be due to the government’s July 1 implementation of a windfall profit tax on the export of gasoline, diesel, and ATF.