PSU oil firms report Rs40,540-crore Q1 net loss

The three state-run oil marketing companies have piled up losses of over Rs40,540 crore during fiscal first quarter ended 30 June 2012 - the biggest ever loss so far reported – as the government failed to compensate these companies for losses on fuel sold at controlled prices.

For Indian Oil Corporation, the largest among the three state-run oil refiners and marketers, the Q1-2012-13 loss was three times its previous largest quarterly loss of Rs7,485 crore.  IOC reported net loss of Rs3,718.70 crore in the same period a year ago.

Hindustan Petroleum Corporation Limited (HPCL) reported a net loss of Rs9,249 crore for the April-June quarter while Bharat Petroleum Corporation (BPCL) reported a net loss of Rs8840 crore for the quarter.

IOC chairman R S Butola said, "The losses (in April-June) are primarily because we did not get Rs22,451 crore in government subsidy."

The loss is three times IOC's previous largest loss of Rs7,485 crore registered in Q2 of 2011-12 fiscal.

State fuel retailers sell diesel, domestic LPG and kerosene at government controlled rates, which are way below market price. Besides, they are also forced to sell petrol - a commodity decontrolled in June 2010 - at a loss because of inflationary concerns.