Record profits After registering the FIR, the profit of public sector petroleum companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) has declined by up to 90 percent in the April-June quarter. The main reason for the decline in profit is the sale of cooking gas (LPG) at a price lower than the cost. The net profit of the country’s largest petroleum company IOC has declined by 81 percent on a single basis in the April-June quarter. This was Rs 2,643.18 crore in the first quarter of the current financial year, while in the same period a year ago, the company had earned a profit of Rs 13,750.44 crore. The company’s profit has also declined on a quarterly basis. In the previous January-March quarter, the company’s profit was Rs 11,570.82 crore. HPCL’s profit declined by 90 percent to Rs 633.94 crore during the quarter. Market experts say that the impact of the decline in the profits of petroleum companies can be seen on the stocks of these companies. The stock might decline.
This led to a drop in profits
BPCL’s net profit declined to Rs 2,841.55 crore in April-June from Rs 10,644.30 crore in the same period a year ago and Rs 4,789.57 crore in the January-March quarter. All three fuel retailers had made huge profits by maintaining petrol and diesel prices despite a fall in costs last year. These companies argued that they did not increase prices despite rising costs last year and incurred losses. However, the benefit of ‘freezing’ prices was lost due to a reduction of Rs 2 per liter in the price of petrol and diesel before the general elections. Apart from this, the three petroleum companies have not received subsidy on selling LPG below the cost.
Which company suffered how much loss
According to the information sent by these companies to the stock markets, IOC has suffered a loss of Rs 5,156.23 crore, BPCL Rs 2,015.10 crore and HPCL Rs 2,443.71 crore due to selling LPG at a price lower than the cost in April-June. According to an order of the Petroleum Ministry, when the market determined price (MDP) of LPG cylinder is less than its effective cost (ECC) to the customer, the petroleum marketing companies (OMCs) have to keep this difference in a separate buffer account for future adjustment. The three petroleum companies IOC, BPCL and HPCL had recorded a record profit of about Rs 81,000 crore in the financial year 2023-24.
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