IOC asks government for Rs13,600 crore in subsidy payments

The state-run Indian Oil Corporation (IOC), intent on not having to report heavy losses in the third quarter of 2012, requested the government to pay a subsidy of Rs13,600 crore (US$2.4 billion) for the first half of the financial year before the company declares third quarter results. The company also asked the government for reimbursement of the Rs6,000 crore (US$1 billion) interest burden on its accumulated borrowings, along with compensation on loss of petrol sales.
If payments are not received, IOC would report the highest-ever revenue loss of R21, 000-22,000 crore (US$3.8 billion-4 billion) for the quarter which ended December 3l, 2012, and could be slapped with a negative credit rating that could affect its capital expenditure plans.
For the three state-owned oil marketing companies, under-recoveries were expected to reach Rs41, 000 crore (US$7.5 billion).
IOC had also been unable to collect around Rs2,600 crore (US$475.9 million) from Air India which should operate on a cash-and-carry basis, but has exceeded the credit period extended to it. (December 26, 2012)