Comments
The public sector oil marketing companies – Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation – said that had it not been for the Government and ‘upstream' assistance, they would have reported a combined loss of Rs 1,32,000 crore.
In a statement issued here on Sunday, the OMCs that have been facing flak for revision in petrol prices, said, “If the Government and upstream assistance was not made available to make good our losses, we would not have been in a position to raise necessary finance to purchase crude from the international market and maintain uninterrupted supply of petroleum products in the country.”
Defending their decisions the companies said that a false impression is being created that OMCs have recorded huge profits in 2011-12. On the contrary, the OMCs have been incurring huge losses, they said.
The companies incurred losses on sale of diesel, domestic LPG and PDS Kerosene at highly subsidised prices. “It is only after the assistance of Rs 83,500 crore from the Government and Rs 55,000 crore from the upstream oil companies (ONGC, OIL and GAIL), totalling Rs 1,38,500 crore, the three public sector OMCs could declare nominal profits,” the statement said.
The three OMCs together had a combined turnover of Rs 8,33,000 crore during 2011-12. Against this, they had declared a combined profit of mere Rs 6,177 crore, which is only 0.7 per cent of their turnover. This level of profit is not adequate for OMCs to enable them to incur huge expenditure on continuous modernisation, making available environmentally compliant fuels, laying of pipelines, enhancing storage, and the development of other infrastructure, the statement said.
Besides, selling highly subsidised diesel, domestic LPG and PDS kerosene, the OMCs are under huge financial strain. Their combined borrowings have gone up from Rs 97,000 crore in March 2011 to Rs 1,28,000 crore in March 2012 .
Similarly, their interest burden has gone up from Rs 4,700 crore in 2010-11 to Rs 9,500 crore in 2011-12.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.