Indian oil Corp (IOC),Indias largest oil marketing company in terms of sales,has posted a 224 per cent rise net profit in the March quarter after it received a lump-sum government subsidy for selling diesel and cooking fuels below cost.
The net profit rose to Rs 12,670 crore in the fourth quarter from Rs 3,905 crore a year earlier.
IOC got Rs 45,485 crore subsidy from the government to make up for almost all of the revenue it lost on selling diesel,domestic cooking gas (LPG) and kerosene below cost during the 2011-12 fiscal.
Of this,Rs 20,800 crore came in the fourth quarter. IOC had lost Rs 75,469 crore on selling diesel,domestic LPG and kerosene at government controlled rates in 2011-12 fiscal. Of this,the upstream oil companies like ONGC gave Rs 29,959 crore.
After the government subsidy of Rs 45,486 crore,the company had to absorb just Rs 22.37 crore loss on the three fuel.
IOC would have suffered a loss of over Rs 45,000 crore had the government extended the subsidy. The companys profit (standalone) for full FY2012 was Rs 3,954 crore as against Rs 7,445 crore in the previous year.
This fall was also due to a one-time outgo of Rs 8,175 crore towards payment of entry tax on crude oil to Uttar Pradesh.
Its total income for the full year was Rs 434,508 crore as against Rs 328,092 crore. Sales in Q4 rose 30 per cent to Rs 128,433.96 crore from Rs 98,482.45 crore.
Besides the under-recovery (revenue loss) on diesel,LPG and kerosene,we also lost Rs 2,236 crore on petrol, the company said adding this loss is not made up by the government because the product is deregulated.
The company had an interest cost outgo of Rs 5,591 crore in 2011-12 as compared to Rs 2,630 crore in the previous year. IOCs borrowings have risen to about Rs 88,000 crore from Rs 52,734 crore as on March 31,2011.