Essar Oil posts Q3 loss on sales tax provision

Moneycontrol Bureau

Essar Oil (EOL) has reported a net loss of Rs 3,968 crore for the December quarter compared to a net profit of Rs 273 crore in the year-ago period, mainly due to a sales provision of Rs 4,015 crore which the company will have to pay to the Gujarat Government.

Last month, the Supreme Court  directed EOL to pay up Rs 6,300 crore in sales tax plus accrued interest to Gujarat government after it lost a case seeking benefit of a government exemption scheme since it has not started production from its refinery in Vadinar, Gujarat, during the qualifying period. However, EOL has filed a review petition in the SC to relook at its earlier decision.

Meanwhile, sales of the company grew marginally to Rs 13,897 crore versus 13,809 crore.

EOL operates in three verticals---refining, marketing, and exploration & production. The company's Vadinar refinery registered a lower throughput of 2.81 million metric tonnes in the quarter due to a planned shutdown for 22 days.

Even its gross refining margins (GRM) slipped to $6.07 per barrel, compared to $7.21 per barrel year-on-year.

LK Gupta, EOL