The Government’s inability to bite the subsidy bullet on petro products led to state-owned oil marketers setting a dubious record — for the highest single quarter loss reported by any Indian company.

While both Indian Oil Corporation and Hindustan Petroleum Corporation logged record losses, IOC’s net loss surged to a staggering Rs 22,451 crore in the first quarter of the current year against a loss of Rs 3,719 crore last year. This is the biggest loss reported by a BSE 500 company this quarter.

HPCL reported a loss of Rs 9,249 crore in the quarter under review versus Rs 3,080 crore in the same quarter the previous year.

The trigger for these losses was higher crude oil price, non-receipt of subsidy, and depreciation of rupee against the dollar. “This loss is the highest reported by the company (IOC),” R.S. Butola, Chairman of IOC, said.

Putting on a brave face, Butola said that unmet ‘under-realisation’ — government speak for losses — of Rs 17,485 crore on sale of diesel, PDS kerosene and domestic LPG in the absence of sanction of budgetary support from the Government was the major factor. IOC registered a foreign exchange loss of Rs 3,187 crore, inventory valuation loss (on falling crude oil prices) of Rs 4,062 crore affecting the gross refining margin (GRM), and higher interest cost of Rs 1,849 crore due to delay in receipt of compensation from Government, Butola said.

HPCL has an unmet under-recoveries of Rs 7,321 crore for the quarter under review.

Asked why IOC’s average GRM for the first quarter was negative $4.81 a barrel, when private refiner Reliance Industries posted a GRM of $7 a barrel, Butola said, “Reliance has the advantage of being a coastal refinery. HPCL also reported a negative gross refinery margin of $2.05 a barrel during quarter. The reason for negative gross refining margin was inventory loss due to crude oil price fluctuations, said B. Mukherjee, Director, Finance, Hindustan Petroleum.

While Indian Oil Corporation’s borrowings as on date stood at Rs 84,000 crore, Hindustan Petroleum’s borrowings were Rs 35,000 crore.

Asked if seeing such a performance the financial institutions are still willing to lend, Butola said, “We have asked them that they shouldn’t look at our quarterly performances, but take a view based on yearly performance.”

The IOC scrip closed 1.52 per cent lower at Rs 252.15 on the BSE on Thursday, while HPCL was down 2.25 per cent at Rs 314.5.

>richam@thehindu.co.in