Oil PSUs double their combined profit in 2002-03

In the first year of oil sector deregulation oil PSUs have nearly doubled their combined profits to Rs 23,254.6 crore in 2002-03. According to Petroleum Minister Ram Naik “this year was a watershed year for the oil industry. The profits of 12 public sector undertakings under the ministry have gone up from Rs 12,708.9 crore in 2001-02 to Rs 23,254.6 crore during 2002-03.” Almost every oil scrip rose between 40 per cent and 60 per cent this fiscal.

Speaking at a function Naik deflected criticisms that the surge in the profits was mainly due to profiteering by the oil PSUs. Stating that the increased profits were largely due to firms being allowed market determined prices, Naik said “better financial performance in 2002-03 was mainly due to higher refining margins and increase in refiner throughput from 95.3 per cent to 98.3 per cent for the downstream companies and increase in crude production by one million tonnes and natural gas production by 9 per cent by the upstream companies.”

Oil jumps to $30.73

LONDON: World oil prices surged on Thursday when a Nigerian Union threatened to cut off oil supplies from the country to protest a government fuel price hike. Benchmark Brent crude oil futures gained 57 cents to $28.54 a barrel in London, while US crude futures rose 58 cents to $30.73 a barrel. (Reuters)

Petroleum product prices rose throughout the year with a devastating impact on inflation, which climbed to over 7 per cent. Consumers also faced a series of price revisions with most of time prices being revised upwards. Naik was at loss to explain the riches of oil firms when they are supposed to be incurring a loss of rs 500 crore a month on LPG and kerosene subsidy. However, the petroleum minister maintained that with the dismantling of APM, margins of the marketing companies have increased while the upstream companies like ONGC were now paid international prices for their crude oil. ONGC’s crossed the Rs 10,000 crore profit mark for the first time, netting Rs 10,529.2 crore. IOC’s profits doubled to Rs 6,115 crore while privatisation bound HPCL leaped 95 per cent to Rs 1,537 crore.