State-owned HPCL posted a net loss of Rs.3364 crore for the second quarter ended September 2011 hit by under-recoveries on subsidized fuel sales, as against Rs.2089 crore profits for the year ago period.
Moreover, the oil marketing firm HPCL’s losses arrived on the back of its healthy sales growth of 20.6% to Rs.37030 crore in Q2 September 2011 over a year ago period. Currently, government has deregulated petrol prices, whereas major state-owned downstream firms have to bear losses on account of under-recoveries from the sale of other fuel items like diesel, domestic LPG and kerosene at subsidized rates.
HPCL Director B Mukherjee stated:
“We had a total under-recovery (revenue loss) of Rs.4,686 crore on selling diesel, domestic LPG and kerosene below cost in the July-September quarter. Of this, Rs.1,561 crore came from upstream firms and the rest Rs.3,125 crore had to be booked on our books.”
Like HPCL, another state-owned oil marketing firm BPCL also posted a loss of Rs.3229 crore for the second quarter ended September 2011. Further, reports indicate that downstream firms are now demanding for further hike in petrol prices by Rs.1.82 per liter to offset effects of rising crude oil prices and depreciating rupee value per dollar.