Indian Oil Corporation (IOC) on Tuesday said it would report loss in the third quarter ended December 31, 2010, unless the government compensated it for the revenue loss due to selling diesel, kerosene and cooking fuel below cost.
Talking to reporters here, IOC Chairman B. M. Bansal said the third quarter would see net loss if compensation was not there. The company lost about Rs.8,500 crore on selling diesel, domestic LPG and kerosene below cost in the October-December quarter. One-third of this might be made up by upstream firms — Oil and Natural Gas Corporation and Oil India — but for the balance it was dependent on the government.
IOC, which last week raised the petrol price by Rs.2.50 a litre after international crude prices touched $92 a barrel, claimed that it continued to lose Rs.6.80 a litre on diesel, Rs.18.66 a litre on kerosene and Rs.366.28 per 14.2-kg LPG cylinder.
“For the full fiscal, we estimate an under-recovery of Rs.40,600 crore.
Even last week's hike in petrol price was lower than the desired Rs.3.72 a litre increase needed to make domestic rates on a par with their imported cost. Our effort is not to fully load consumers in anticipation that the crude oil prices will soften down in future,'' Mr. Bansal said at a press conference.
Fuel grade ethanol
IOC, BPCL and HPCL together are projected to lose Rs.73,600 crore in revenues this fiscal. IOC on Tuesday said it had signed an agreement with LanzaTech, a leading clean energy technology company, for production of fuel grade ethanol.
A memorandum of understanding (MoU) was signed for collaboration in a technology demonstration that will enable IOC to produce fuel grade ethanol.
As a part of the collaboration, IOC will evaluate LanzaTech's proprietary gas fermentation technology in one of its refineries to produce fuel grade ethanol.
Mr. Bansal said IOC was looking at innovative options in augmenting its energy resources to meet the growing demand and LanzaTech technology was likely to support its efforts by harnessing fuel grade ethanol from waste gas stream for partly meeting the requirements for petrol blends in the future.
“We are determined to explore sustainable options in bio-fuels and the ethanol blending efforts will have to be supplemented by technology solutions as well,'' Mr. Bansal said.