Indian Oil Corporation (IOCL) reported a net profit of Rs 563.4 crore on a standalone basis for the three months ended September 30, recording an 82.6% decrease from the same period a year ago. The largest state-owned oil refining and marketing company in India attributed the fall in profit to inventory losses, stemming from fall in global oil prices. As the retail prices of petroleum products are mapped with international rates, gradual fall of global oil prices in Q2FY20 meant that by the time IOCL sold its products after processing crude, the retail rates had dipped. The inventory loss in the quarter was Rs 1,807 crore against inventory gains of Rs 2,895 crore in the corresponding period a year ago, said IOCL chairman Sanjiv Singh.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) fell by 47.2% year-on-year (y-o-y) to Rs3,572.2 crore as revenue from operations fell 12.8% y-o-y to Rs1.32 lakh crore. The company also received lower returns from its refinery operations as the firm earned only $1.28 from selling every barrel of refined products in the quarter, 81.1% lower than Q2, FY20.
Including exports, IOCL sold 21.5 million tonne (MT) of petroleum product in the quarter, marking a dip of 0.5% y-o-y. Refinery throughput was 17.5 MT in the same period, 1.7% lower y-o-y. Senior officials attributed the flat sales to extended monsoons dampening demand. Commenting on the latest government policy of relaxing norms for opening fuel retail outlets, Singh said that customers would benefit from additional competition. Refusing to elaborate further, Singh said that “existing players also see bug opportunities from the new retail policy.”
The company expects the five million metric tonne per annum (MMTPA) LNG import, storage and re-gassification terminal at Ennore to be fully operational by December, 2020. It is currently supplying gas to Manali refinery, Madras Fertilizers and Tamilnadu Petroproducts. To upgrade its refineries for BS-VI fuel norms, IOCL would shut down its Haldia refinery till January, 2019, Mathura refinery in November-December and its Bongaigaon and Guwahati refineries between December and February, 2019.
