State-run oil refiner and marketing firm Bharat Petroleum Corp posted a wider quarterly loss on Friday, hit by foreign exchange losses and the lag between selling petroleum products below cost and receiving a government subsidy.
BPCL's net loss of Rs 8840 crore follows losses from other state-run oil marketing companies Indian Oil Corp ) and Hindustan Petroleum Corp, and may put pressure on the cash-strapped government to raise fuel prices.
The three companies have together racked up losses of Rs 40540 crore during their fiscal first quarters, four times the loss from a year earlier.
The three companies posted a total net profit of Rs 5290 crore in the fiscal year ended March 2012.
State oil companies can fix retail prices for petrol, but the government continues to control prices of diesel, cooking gas and kerosene. The government last allowed a diesel price increase in June 2011.
The government, which bears a third of the shortfall between costs and selling prices, typically pays the subsidy in the second half of the year, leading to weak first-quarter results. State oil and gas producers bear part of the losses in the form of cash discounts to refiners.
The results were also affected by a falling rupee. The Indian currency fell about 8.5 percent against the dollar during the April to June period. India imports 80 percent of its crude oil requirements, mostly through its state oil companies.
BPCL said its net loss rose to Rs 8837 crore in the June quarter, from Rs 2562 crore a year earlier. Net sales rose 18 percent to Rs 54523 crore.
The company incurred a foreign exchange fluctuation loss of Rs 1,611 crore, while finance costs shot up more than 50 percent to Rs 520 crore on account of higher debt.
The company incurred net under-recoveries of Rs 7960 crore on account of selling petroleum products below cost.
Ahead of the results, shares in BPCL, valued by the market at $4.5 billion, closed 3.6 percent higher in a flat Mumbai market.