Indian Oil Corporation, India’s largest refining and oil marketing company, on Thursday reported a 2.5-fold jump in net profit for the April-June period of FY16 at Rs 6,435.7 crore against Rs 2,522.9 crore in the year-ago period.
The higher profit is on account of seven-year-high refining margins, resulted from inventory gains, said IOC chairman B Ashok.
The PSU refiner’s gross refining margin (GRM) climbed 4.8 times to $10.77/barrel during the first quarter of FY16 against $2.25/barrel in same quarter previous year. Of the total GRM, $4.7/barrel has been contributed by inventory gains, which include Rs 2,395 crore on crude oil and Rs 823 crore on products.
“Variation in profit is majorly due to higher refinery and petrochemical margins,” Ashok told reporters on Thursday.
“GRM are the highest since June quarter of the 2008-09 fiscal when we clocked a $16.81-per-barrel margin,” he added.
Refinery throughput was 5.5% higher at 13.568 million tonne. “Our refinery margin in the quarter was Rs 6,521 crore compared to Rs 705 crore in the corresponding period of the previous financial year. Petochemical margin rose to Rs 1,875 crore from Rs 719 crore,” said Ashok.
Other income during the June quarter plunged 80% to Rs 362.4 crore whereas tax expenses shot up 169% to Rs 2,764.2 crore compared to the same quarter last year. Finance cost also slipped 35.2% to Rs 592.2 crore from Rs 913.9 crore.
There was a total of Rs 3,218 crore of inventory gain, resulting from valuation of oil rising between the time it is bought, processed and sold.
The company’s borrowings came down to Rs 52,519 crore as on June 30 from Rs 55,247 crore as on March 31.Total income from operations dropped 19.2% year-on-year to Rs 1.01 lakh crore due to fall in crude oil prices.
IOC received most of the revenue loss on sale of public distribution system kerosene and subsidised cooking gas compensated by the government (Rs 1,732.95 crore) and upstream oil firms such as ONGC and Oil India (Rs 878.84 crore).