Business Daily from THE HINDU group of publications
Wednesday, Sep 27, 2006
ePaper


News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Industry & Economy - Petroleum
Web Extras - Outlook
Get Latest BSE Quote
Oil marketing cos may end Q2 with higher loss

Pratim Ranjan Bose

Fall in international motor spirit price, refining margin


Under-realisations
Senior officials of the three PSUs said that though selling of petrol have lately become profitable, sales of all other products are resulting in heavy under-realisations. International price of motor spirit started falling in the beginning of this month and is now ruling at $63-64 a barrel roughly $14 lower.

Kolkata , Sept. 26

Notwithstanding the slide in crude prices, oil marketing companies may end the second quarter with higher loss from operations.

Though the companies have recently started booking profits due to fall in international motor spirit price, sharp fall in refining margin and an inventory loss during the month are expected to result in net losses. The problem is compounded due to higher under-realisation especially in LPG and kerosene during July-August. To add to the woes of the companies, furnace oil prices, which as such rule lower than crude prices, have witnessed a sharper fall than crude.

To book profits in the last quarter IOC, BPCL and HPCL are therefore pinning hopes on issue of oil bonds - worth roughly Rs 14,000 crore — for both first and second quarter together. Of the total IOC expects to receive close to Rs 7,400 crore. HPCL and BPCL will receive over Rs 3,000 crore each.

BPCL and HPCL posted losses of Rs 677 crore and Rs 607 crore respectively in the first quarter. IndianOil registered a net profit of Rs 1,781 crore riding on Rs 3,225 crore proceeds from part-sell of stake in ONGC.

Senior officials of the three PSUs said that though selling of petrol have lately become profitable, sales of all other products are resulting in heavy under-realisations. International price of motor spirit (MS) started falling in the beginning of this month and is now ruling at $63-64 a barrel roughly $14 lower.

On the contrary, international diesel prices are ruling firm at $82 a barrel resulting into under-recovery of roughly Rs 4.5 per litre at home. International prices of LPG and SKO are ruling at $550-560 and $85-86 per bbl respectively, resulting under-recoveries to the tune of Rs 187 per cylinder and Rs 14 per litre in India. LPG and SKO prices went up by $20 and $8 per bbl respectively in July-August.

"We are expecting the total under-realisation to be marginally higher than the first quarter," an IOC official said. IOC registered Rs 4,898 crore under-realisation net of discounts during Q1.

The gross refining margin (GRM), which was $11.25 per bbl during the first quarter is expected to be in the region of $6 during the current quarter.

The refining margin was under pressure since August due to reduction in differential between crude and product prices and crashed to $4 per bbl in September due to a sharper fall in MS prices compared to fall in crude prices.

BPCL sources said that while the under-realisation in MS/HSD was down by Rs 300 crore during the second quarter, the gain was fully offset by an identical rise in under-recovery in SKO and LPG.

BPCL registered under-recoveries to the tune of Rs 2,200 crore in the first quarter. GRM which was $4.7 per barrel in Q1 is expected to be lower by $2 per bbl. HPCL recorded Rs 2,113 crore under-recovery in the first quarter.

More Stories on : Petroleum | Outlook | Bharat Petroleum Corporation Ltd | Hindustan Petroleum Corporation Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Brewing `low' in Bay bears watching


Biz chamber urges PM to boost bio-diesel sector
Star Export House status to law firm
Local investors' meets planned in Kerala
CESC's Budge Budge plant registers highest PLF in 2005-06
Maharashtra to go slow on land takeover for SEZs
Orissa inks MoUs for 10 thermal power plants
States asked to earmark non-agri land for SEZs
`SEZ land rules have enough safeguards'
No SEZs in fertile farmlands: Reddy
Pochanpalli road project fiscal closure
Natural gas futures turn risky proposition
Oil marketing cos may end Q2 with higher loss
No immediate cut in petroproduct prices: Deora
GAIL awards pipeline project to Chinese-led consortium
Maharashtra to look into ST on petrol, diesel
Ratnagiri Gas allowed to sell power to Maharashtra
A richly endowed region grows in strength
Shyam brand makes a mark in steel industry
Technical textiles meet in Mumbai
Maditssia memorandum to Kalam
Rubber prices may dip to Rs 70-75 level
Students urged to look beyond IT sector
Corolla sales down 50 pc since Civic launch
Rajiv Institute of Medical Sciences to be launched today
Bengal to hand over land to Tatas
Housing Board demand for additional cost stayed
Vipul to develop 500 acres of townships, commercial projects
Nepa Mills revival boosts demand for old newspapers
Nasscom plans tougher laws for data protection in BPOs
Subash Chandra and brother join UNI board
Indian HR base turning hinterland for West
Will charities overtake govts?
AP Govt to tap micro enterprises
Flood-hit highways repaired in Gujarat
Malaysia proposes ASEAN, India tourism summit
CESC sees power theft declining in Kolkata


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line