Loss-hit PSU oil cos won't declare unaudited results
State-owned oil marketing companies (OMCs) have decided not to announce their unaudited results, fearing a backlash from the market to their loss-ridden performance.
However, country’s largest refiner and Fortune 500 company IOC has managed a miserly net profit of around Rs 900 crore on a turnover of around Rs 2,85,000 crore. “The government has advised us not to announce the unaudited results, as it may give more compensation after the Budget session ends,” an official of one of the oil companies said.
The companies have already informed stock exchanges that they will be publishing their audited financial results only for the financial year 2009-10. They hope that the government will bail them out before May 31, 2010, the deadline to make their results public.
Normally, companies announce their unaudited results for the financial year ended March 31 of a particular year in the following month. A senior oil ministry official confirmed the development. “OMCs (state-owned fuel retailers) are bleeding for no fault of theirs,” he said requesting anonymity.
The OMCs have performed poorly, because the government forced them to sell petrol, diesel, kerosene and cooking gas below the cost without adequately compensating them.
The oil ministry is in regular touch with the finance ministry to seek more compensation for the three oil companies, the ministry official said. The oil ministry is demanding an additional Rs 19,000 crore from the finance ministry. The finance ministry, which has already paid a cash compensation of Rs 12,000 crore to the three oil companies for their losses on 2009-10, is unwilling to pay more.
The combined revenue loss of the three oil companies in 2009-10 is around Rs 47,000 crore. The oil ministry is demanding about Rs 19,000 crore more as per an earlier decision of the government that it would foot the entire subsidy bill on kerosene and cooking gas. Upstream oil companies — Oil & Natural Gas Corp (ONGC), Oil India (OIL) and Gail India — may have to pay the balance Rs 16,000 crore to the three companies.
The oil companies were saddled with huge revenue losses towards in the second half of 2009-10 due to rising global crude oil prices. Benchmark Brent crude price jumped to $80.3 a barrel on March 31, from $65 a barrel at the end of the second half of 2009-10.
Brent is currently hovering around $86 a barrel, making the current financial year even more difficult for the oil companies. As per the oil ministry, combined losses of the three companies for 2010-11 are estimated at around $90,000 crore. Currently, oil companies are losing about Rs 7 a litre on petrol, about Rs 5 a litre on diesel, Rs 18.42 a litre on kerosene and Rs 265.27 per cylinder on cooking gas.