New Delhi, May 6: Oil India Ltd has expressed its displeasure at having to offer relief to the oil PSUs, Indian Oil and Bharat Petroleum.

The company has to pay the sales tax and bear the transport cost on the crude it sells to the two PSUs. It has informed the petroleum ministry that this may hit its profits for 2006-07, which is not desirable since it is planning an IPO.

Sources said the net profit of the company was expected to fall below the Rs 1,600-crore mark in the last fiscal from Rs 1,690 crore in 2005-06. They said a weakened bottomline could lead to lower realisations from the IPO.

OIL already compensates IOC and BPCL for the losses suffered on subsidised sales by the PSUs of kerosene and petroleum to households. It is unhappy that it has to foot the bill for the sales tax and transport cost as well.

This ‘double compensation’ is because of rules on crude sales in the Northeast. Producers will have to bear the transport cost and the sales tax obligation of the buyer if the crude is sold within the region.

This is not applicable on the crude sold outside the region. The rules do not affect ONGC, the other producer in the region, since it sells 95 per cent of its crude to the rest of India.

OIL wants to be treated on a par with ONGC. It wants the government to waive the Rs 200 crore incurred yearly on the sales tax and transport bill.

The waiver will help OIL earn much higher profit this fiscal.

Though the petroleum ministry has set up a panel in this regard, OIL wants the government to act immediately.

Any relief will be reflected in its fourth-quarter results, which is due soon.

OIL officials feel ONGC carries a greater clout within the ministry because of its larger size.

“We should be treated on an equal footing,” they said.