State-owned Indian Oil Corporation (IOC) on Friday reported a Rs 1,993 crore loss due to selling petrol and diesel at a loss during the first quarter of the current fiscal. The company reported Rs 5,914 crore net profit in the same quarter last fiscal.
Along with its peers in oil marketing space, IOC has not raised retail prices for transport fuels in proportion to the rise in crude oil prices. This eroded gains in average gross refining margin (GRM) that zoomed to $31.81 per barrel in Q1FY23 compared with $6.58 a barrel in the same quarter last fiscal.
“The core GRM or the current price GRM for the period April-June, 2022 after offsetting inventory loss/gain comes to $25.34 per barrel. However, the suppressed marketing margins of certain petroleum products have offset the benefit of increase in GRM,” IOC said.
This is the first quarterly loss for the company in over two years. The company had in January-March 2020 reported a net loss because of inventory losses.
In a July 11 report, ICICI Securities had said that oil marketing companies – IOC, Bharat Petroleum and Hindustan Petroleum – may post a combined loss of Rs 10,700 crore in the first quarter of the current fiscal.
The brokerage firm said the loss will be due to selling transport fuels at a loss of Rs 12-14 per litre even as there GRMs will remain fairly strong at $17-18 per barrel.
IOC’s profit before tax for the reporting quarter was Rs 2,529 crore compared with Rs 7,798 crore a year earlier. Revenue from operations rose to Rs 2.52 trillion from Rs 1.55 trillion. The net profit margin was at (-) 0.79% compared with 3.83% a year earlier.
The revenue was higher because of higher sales which stood at 24.64 million metric tonnes (MMT), including exports of 1.67 MMT, in Q1FY23 compared with 18.7 MMT in Q1FY22.
“Our refining throughput for Q1 2022-23 is 18.93 MMT and the throughput of the corporation’s countrywide pipelines network including gas pipelines is 24.64 MMT,” said IOC Chairman S M Vaidya in a company statement.