Robust Q4 nos: State-run oil cos like IOC, HPCL may cut petrol price by Rs 2/litre from June 1

NEW DELHI: State-run oil companies areready to cut prices of petrol by about Rs 2 per litre after reporting strongearnings, signalling a surprise turnaround in the sector that scared investorswith talk of astronomical losses from subsidised fuel sales.

Oilmarketing companies could cut retail price of petrol by about Rs 1.67 per litre(about Rs 2 after taxes) from June 1 in view of the drop in the average rupeeprice of petrol in the international market, Hindustan Petroleum Corp Chairman& Managing Director S Roy Choudhury told reporters.

HPCL'sfourth-quarter net profit jumped to Rs 4,631 crore, more than four times itsearnings a year ago.

IndianOil, which reported an over-three-foldjump in fourth-quarter net profit to Rs 12,670 crore, is also keen to pass onthe benefit of lower international prices to customers.

IOC ChairmanRS Butola said: "We will pass on the entire benefit to consumers. I would liketo pass on 50 paise, 70 paise or 90 paise, whatever we gain, to consumers in thenext pricing cycle."

Profits of oil marketing companies were boostedby the highest-ever contribution of Rs 44,466 crore from Oil & Natural GasCorp (ONGC).

Despite the generous contribution - given throughstate-mandated discounts on crude oil sales - ONGC's fourth-quarter profitdoubled to Rs 5,644 crore while PAT for the entire fiscal rose 33% to Rs 25,123crore.

The state exploration company supplies crude oil at a ratelinked to the dollar price of international grades of oil.

Thedepreciation of the rupee and an increase in international prices in the lastquarter, thus, led to windfall gains for ONGC.

State-run refiners hadearlier complained that their combined revenue loss from the sale of fuel atgovernment-determined rates would amount to Rs 1.38 lakh crore in 2011-12, andthey would post losses for the full year.

However, contributions fromthe government and upstream players such as ONGC, Oil India and Gail India havepropped up their balance sheets.

Citing prospects of heavy losses,oil marketing companies had raised the pre-tax price of petrol by Rs 6.28 perlitre last Wednesday, immediately after the budget session of Parliament.