NEW DELHI: State-run Indian Oil Corporation has seen a sharp fall in its net profit during the second quarter of the current fiscal on account of inventory losses and lower refining margins. Net profit stood at Rs 563.42 crore during the July-Sept quarter, against Rs 3,246.93 crore profit it reported a year ago.
The country’s largest refiner of fossil fuel also saw its revenue plunge to Rs 1.32 lakh crore, down 13 per cent from the corresponding quarter of the previous fiscal. “The variation is largely on account of inventory loss. There was an inventory loss of Rs 1,807 crore this quarter, while there was an inventory gain of Rs 2,895 crore a year ago,” IndianOil chairman Sanjiv Singh said. The lower profits is also due to subdued global gasoline prices, he said.
On a per-barrel basis, the Gross Refinery Margin (gain per barrel of crude oil processed) shrank to $1.28 a barrel from $ 6.79 a barrel. “On physical performance, refineries operated perfectly well but because of lower cracks, the GRM was lower,” Singh said, adding that the cracks have begun improving.
Singh also noted that petrol demand has been robust but diesel has been fluctuating this year. Consumption of petrol and diesel have risen 9.1 per cent and 1.1 per cent respectively in the first half of FY20, but demand seems to be decelerating in recent months. While petrol demand growth dropped to 6.2 per cent, diesel demand contracted by 3.3 per cent in September. Total oil demand also fell 0.3 per cent in September but rose during the April-September period by 1.4 per cent.
Indian Oil has also begun supplying IMO-2020 compliant marine fuel with 0.5 per cent Sulphur at Indian ports. The first supply was made at Kandla port last week. Bunker fuel deliveries at other ports of Mumbai, Mangalore, Tuticorin, Chennai, Visakhapatnam, Paradip and Haldia shall start by mid-November 2019.