MUMBAI (Reuters) – State-run oil refiner and marketing firm Bharat Petroleum Corp Ltd (BPCL.NS) 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 88.4 billion rupees follows losses from other state-run oil marketing companies Indian Oil Corp (IOC.NS) and Hindustan Petroleum Corp (HPCL.NS), and may put pressure on the cash-strapped government to raise fuel prices.
The three companies have together racked up losses of 405.4 billion rupees during their fiscal first quarters, four times the loss from a year earlier.
On Thursday, HPCL posted a net loss of 92.5 billion rupees, while IOC reported a quarterly loss of 224.5 billion rupees, which media reports said was a record in Indian corporate history.
The three companies posted a total net profit of 52.9 billion rupees 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 88.37 billion rupees in the June quarter, from 25.62 billion a year earlier. Net sales rose 18 percent to 545.23 billion rupees.
The company incurred a foreign exchange fluctuation loss of 16.11 billion rupees, while finance costs shot up more than 50 percent to 5.2 billion on account of higher debt.
The company incurred net under-recoveries of 79.6 billion rupees 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.
(Reporting by Prashant Mehra; Editing by Mark Potter)