State-run Oil & Natural Gas Corp (ONGC), which is forced to sell crude at a discount to help state refiners sell fuel cheap, also suffered last year, particularly in the last quarter, when its profit dipped 26% to Rs 2,791 crore. 

Both companies are expected to gain if fuel prices are raised again. The IOC is now considering raising petrol prices soon. 

"Our desired price increase is Rs 1.35 per litre. Very soon we will have to take a view on raising the price," Butola said. 

IOC's fourth-quarter net profit fell 30% to Rs 3,905.16 crore, despite government subsidy payments and mandatory discounts from upstream firms such as the ONGC. 

"Our profit would have been higher by 3,200 crore for the fiscal year if government had given us subsidy equivalent to the previous year," RK Goyal, IOC's director for finance told reporters. 

The company is allowed to raise prices of all fuels except diesel, kerosene and cooking gas, but IOC could not raise petrol prices to the extent it wanted because of political pressure, causing it a loss of about Rs 1,000 crore, IOC officials said. 

The IOC also hopes to gain from higher state-set diesel rates. The empowered panel of ministers, which decides diesel, kerosene and cooking gas rates, is scheduled to meet on June 9, and consider raising the prices of regulated fuels prices for the first time in nearly one year. According to an IOC estimate, from Tuesday the company's revenue loss in diesel will be about Rs 12.64 a litre. It will lose Rs 25.85 a litre on kerosene and Rs 380.57 on a cooking gas cylinder. 

The ONGC, which has also declared its annual results for 2010-11, had to pay the highest ever Rs 24,892 crore upsteam discounts to three state-run oil marketing firms - IOC, BPCL and HPCL - to keep them profitable. 

"We paid Rs 12,136 crore in fuel subsidy compensation in Q4 compared to Rs 4,999 crore in the same period the previous fiscal," ONGC acting chairman & managing director A K Hazarika told reporters. 

Despite higher subsidy burden the company reported a 13% growth in its net profit for 2010-11 at Rs 18,924 crore, he said. But for the subsidies, ONGC's net profit should have been higher by Rs 14,247 crore in the full fiscal. 

ONGC director for offshore operations, Sudhir Vasudeva said the company was expected to ramp up its crude oil production by 3.5 million tonne in 2013-14. The company's crude oil production had marginally declined at 24.42 million tonne in 2010-11 from 24.67 million tonne in the previous year due to ageing oil fields. But its gas output was almost flat at 23.09 billion cubic meter.