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IOC unit feels the heat

New Delhi, May 28: The oil crisis and the spiralling cost of steel have almost doubled the cost of Indian Oil Corporation Limited’s Paradip refinery- cum-petrochemical project.

“The project will cost anywhere between Rs 42,000 crore and Rs 45,000 crore,” Indian Oil Corporation (IOC) chairman Sarthak Behuria said. The cost of the project has increased from the previous estimate of Rs 26,000 crore because of a rise in the steel price and other input costs.

“We have now decided to implement the project in phases. The refinery will be built first,” he said. The 15-million-tonne refinery alone will cost nearly Rs 30,000 crore, he said, adding that the petrochemical unit will be built after the refinery is commissioned by 2012.

On the possibility of the refinery losing out on the tax benefit, Behuria said if required the company could request the government to extend the 2012 deadline. To get tax relief, all refineries fully owned by state oil companies must start production by 2012.

The company posted a net loss of Rs 414.27 crore for the quarter ended March 31, 2008 against a net profit of Rs 1,502.69 crore in the corresponding period last year.

However, for the year ended March 31, 2008, IOC reported a consolidated net profit of Rs 7,912.74 crore compared with Rs 7,867.45 crore in the year-ago period.

The company’s board has declared a dividend of 55 per cent for 2007-08, that is, for every share of face value Rs 10 the shareholder will get a dividend of Rs 5.50.

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