State-owned oil marketing companies IOC, BPCL and HPCL may for the first time ever post the second consecutive quarterly loss with a combined loss of Rs 21,270 crore in July-September, on holding petrol and diesel prices below the cost of production.
The three state-owned firms -- Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), had in the first quarter of the current fiscal year (April-June) posted a combined loss of Rs 18,480 crore due to erosion in the marketing margin on petrol, diesel and domestic LPG.
"The three oil marketing companies IOC, BPCL and HPCL remain trapped in the quagmire of weak marketing losses and there is not enough traction in refining margins," ICICI Securities said in a sector report. The three firms are to announce second quarter earnings later this month or in early November.
In the first quarter, record refining margins were wiped away by losses booked on not revising petrol and diesel prices daily in line with cost. While the difference between cost and retail selling price of petrol and diesel has narrowed, refining margins have fallen in the second quarter (July-September), worsening finances of the three firms.
The "Q2 may see the trend worsen, with USD 5.6-15.9 per barrel quarter-on-quarter dip in gross refining margins (GRMs) which is compensated only partly by improvement in blended retail fuel losses (Rs 9.8 per litre in in Q2 versus Rs 14.4 a litre in Q1)," the brokerage said.