Date:01/08/2006 URL: http://www.thehindu.com/2006/08/01/stories/2006080104151500.htm

Business

ONGC share sale helps IOC post profit

Special Correspondent

Actually the company is suffering losses on sales of products

NEW DLEHI: The Indian Oil Corporation (IOC) has recorded a net profit of Rs. 1,780.52 crore in the first quarter of the current fiscal (April-June) against a loss of Rs. 57.93 crore in the same period last year.

According to IOC Chairman S. Behuria, the company managed to achieve profit only because of gains from sale of shares in the Oil and Natural Gas Corporation (ONGC) as it is actually suffering losses of Rs. 100 crore a day on sales of petroleum products.

Mr. Behuria told newspersons here on Monday that the net loss before considering the one-time profit on sale of ONGC shares in the April-June quarter was Rs. 1,444.26 crore. The company made a net gain of Rs. 3,224.78 crore from sale of the equity stake in ONGC, which had been acquired a few years ago. This had helped in attaining an overall profit in the first quarter, despite the fact that the company was losing Rs. 100 crore everyday on sale of petrol, diesel, LPG and kerosene at prices below the cost of production, he said.

Mr. Behuria said that even after the hike in petrol and diesel prices on June 5, IOC was suffering a loss of Rs. 6.31 a litre on petrol, Rs. 8.25 a litre on diesel, Rs. 18.69 a litre on kerosene and Rs. 166 per LPG cylinder. Besides, he said, the oil bonds, which were to be issued by the Government to provide support to the oil companies had not yet been issued. He said it was now expected that about Rs. 7,000-crore worth of oil bonds would be issued by mid-October for the April-June and July-September quarters.