Move to hike LPG cylinder cap will hit working capital: IOC

Written By Unknown on Senin, 20 Januari 2014 | 12.44

State-owned  Indian Oil Corporation sees under-recovery of Rs 5700 crore if the cap on subsidised cooking gas cylinders is raised to 12 from 9 currently, the company's Director, Finance PK Goyal told CNBC-TV18 Monday.

Oil minister Veerappa Moily on Friday had said that the cap would be raised. This followed Congress leader Rahul Gandhi's speech at the AICC session in which he proposed that the government should raise the cap.

Also read: Subsidised LPG cylinder cap to be increased to 12/yr: Govt 

According to Goyal, 97.2 percent of the users of LPG consume 12 cylinder annually. He added that so far there has been no communication from the oil ministry on increasing the cap.

Goyal said if the number of subsidised cylinders were to be raised, there would be no impact on the profit and loss account since the under recovery would be compensated by the government.

However, the move would impact working capital requirements of the company, Goyal said.

transcript to follow soon


IOC stock price

On January 20, 2014, at 11:14 hrs Indian Oil Corporation was quoting at Rs 223.40, down Rs 1.1, or 0.49 percent. The 52-week high of the share was Rs 375.00 and the 52-week low was Rs 186.20.


The company's trailing 12-month (TTM) EPS was at Rs 67.69 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 3.3. The latest book value of the company is Rs 251.75 per share. At current value, the price-to-book value of the company is 0.89.


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