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Bharat Petroleum Corporation has reported a net loss of Rs 1,718.10 crore for the quarter ended June 30  

BPCL posts Rs 1,718-cr net loss on under-recoveries

Mumbai : Bharat Petroleum Corporation has reported a net loss of Rs 1,718.10 crore for the quarter ended June 30 compared to a profit of Rs 614.12 crore in the same period last year.Net sales rose to Rs 34,211.89 crore (Rs 25,492.78 crore). The average gross refining margin was $3.57 a barrel ($3.17/bbl). Foreign exchange losses were Rs 338.26 crore against gains of Rs 233.03 crore in April-June 2009. Along with Indian Oil and Hindustan Petroleum Corporation, the three public sector refiners have reported combined losses of nearly Rs 7,000 crore for this quarter as they still have not been compensated fully for selling fuel at subsidized prices. In the case of BPCL, one third of the losses totalling Rs 1,549.55 crore has been recovered from the upstream trio of the Oil and Natural Gas Corporation, Oil India, and Gail (India). Yet, BPCL is left with Rs 3,100-crore fuel losses that are expected to be made good by the Finance Ministry.

"The results have been impacted by the larger under recoveries this quarter. Looking forward, we are hoping to improve our performance," Mr. Sudhir K. Joshi, Director (Finance), told Business Line. BPCL's fuel losses for this fiscal are projected at around Rs 12,000 crore of which Rs 4,650 crore has already been accounted for in the first quarter. To that extent, the company will have to contend with only Rs 7,350-crore losses in the three remaining quarters. The upstream oil companies will square up one-thirds (Rs 2,450 crore) while the Finance Ministry is expected to make good a lion's share of the balance Rs 4,900 crore. Eventually, BPCL will end up absorbing a part of these losses, which is also true for its downstream counterparts IOC and HPCL. All this is based on the assumption that world crude oil prices will continue to be at under $80 a barrel for the rest of the year. Oil industry officials say that should prices start inching towards the $90/bbl mark, things could get a little difficult from the viewpoint of implementing the present compensation formula. The company's stock price on the BSE gained 0.53 per cent to Rs 642.35 on Friday.

The Hindu Business Line newspaper.

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