State refiners reported large losses on inventory for the third quarter, hit by the rapid decline in global oil prices, though some were helped by swift payment of government subsidies to compensate for its regulation of retail fuel prices.
Indian Oil Corporation (IOC), the country's largest refiner, was hit hardest and on Friday reported a net loss of Rs 2637 crore ($425 million) in the three months to December 31, against a loss of Rs 961 crore a year earlier.
Its loss on inventory, referring to the price impact in the time it takes to process crude and market the refined product, was Rs 12,842 crore ($2.07 billion) compared with a gain of Rs 653 crore a year earlier, Chairman B Ashok told reporters.
Brent crude dived to less than $60 a barrel in December from a peak above $115 last June.
However, the government's swift payments to cover enforced low retail fuel prices offset losses on inventory for two junior refiners, officials said. Such payments are usually made months in arrears.
Despite the higher inventory hit and squeezed profit margins, Hindustan Petroleum Corp reported a narrower net loss of Rs 325 crore, while Bharat Petroleum (BPCL) managed to post a profit of Rs 551 crore.
The three companies together lost Rs 15,981 crore in the quarter because of the price cap on retail fuel sales, against Rs 39,725 crore a year earlier, Reuters reported on Thursday.
The drop in those losses was because the government ended controls on pricing for diesel, which makes up about 40 percent of the country's demand for refined fuel.
"We have managed to post profit because of timely release of subsidy, operational efficiencies and optimisation of cost despite high inventory losses," said BK Datta, head of refineries at BPCL.