New Delhi, Aug. 13: Indian Oil Corporation (IOC) has narrowed its net losses in the first quarter of this fiscal to Rs 3,093 crore from Rs 22,451 crore in the year-ago period because of the subsidy compensation received by the firm.

“The losses have narrowed because the company has received compensation for selling fuel below market cost,” chairman R.S. Butola said.

IOC lost Rs 13,625 crore on selling diesel, LPG and kerosene at government-controlled rates during the April-June period.

It received Rs 4,261.29 crore from the government and Rs 8,151.77 crore from upstream PSUs such as ONGC as subsidies to bridge part of the loss, leaving the company to absorb Rs 1,211.67 crore as loss.

Besides, the rupee depreciation and a provisioning of Rs 400 crore towards employee arrears added to the loss.

The PSU did not receive any subsidy in the first quarter of 2012-13, which resulted in the huge loss of more than Rs 20,000 crore. The subsidies came later that allowed the PSU to post a healthy profit for the fiscal.

“We had positives on refinery margins and petrochemical business turning positive,” Butola said.

Turnover rose to Rs 110,466.61 crore from Rs 96,860.69 crore in the year-ago quarter.

The company earned $1.67 on turning every barrel of crude oil into fuel compared with a negative gross refining margin of $4.81 a year earlier. Foreign exchange loss for the quarter was at Rs 4,024 crore compared with Rs 3,187 crore in the year-ago period.

“Our refinery margins are not comparable with industry peers as unlike other companies, refineries and pipelines are separate profit centres for Indian Oil,” Butola said.

After taking the margins of two together, IOC had a combined gross refinery margin of $4.23 per barrel in the first quarter against a negative margin of $2.25 a year ago.