State-run Indian Oil Corp (IOC) has reported a 14.5 per cent increase in net profit for the quarter ending March 31, 2013. The rise in profit comes on the back of fuel subsidy that it received from the government that did not pay any subsidy in the third quarter and released lumpsum in the quarter under review.
Net profit in the March quarter increased to Rs 14,512.81 crore from Rs 12,670.43 crore in the corresponding period last year.
IOC said it will receive Rs 53,278.07 crore as cash subsidy from the government for the full 2012-13 fiscal, up from Rs 45,485.84 crore in the previous financial year. IOC sells diesel, LPG and kerosene at government-controlled rates which are way below the cost. Part of the losses incurred in the process are reimbursed by way of cash subsidy from the government.
Besides, the company got Rs 31,966.84 crore from upstream firms like Oil and Natural Gas Corp (ONGC) as support for selling diesel and cooking fuel at below market price.
Despite the government subsidy and upstream support, the company booked Rs 548.49 crore loss on the fuel sale in the fiscal and earned $2.39 on turning every barrels of crude oil into fuel in Q4 as opposed to $2.26 per barrel gross refining margin in the same period the previous year.