NEW DELHI: India's largest oil sector firm, Indian Oil Corp (IOC), reported a 40 per cent jump in net profit during the quarter ended March 31. According to financial statements released by the firm, it has recorded a net profit of Rs 5,218 crore compared to Rs 3,720.62 crore during the same period last year.
Speaking to reporters, IOC chairman Sanjiv Singh noted that both increased gross refining margins (GRM) and inventory gains had had a positive impact. In terms of GRM, the company earned $9.12 on turning every barrel of crude oil into fuel in the fourth quarter of 2017-18 fiscal as compared to $8.95 per barrel gross refining margin a year ago. Meanwhile, inventory gains stood at Rs 3,442 crore for the quarter.
Inventory gains arise when the oil prices are lower when the company buys oil, but rise by the time it sells the processed and refined fuel. Since retail prices are decided on the rate prevalent on the day of sales, there is an inventory gain.
Singh also said that IOC’s turnover rose to Rs 1.36 lakh crore in the fourth quarter of the financial year ended March 31, from Rs 1.24 lakh crore the previous year. The company also sold 20.8 million tonnes (MT) of petroleum products during the last quarter of 2017-18, higher than the 19.64 MT domestic sales a year ago. Exports also rose, to 1.76 MT from 1.46 MT.
19-day freeze
Responding to questions on why oil firms had frozen prices for 19 days ahead of the Karnataka polls, Singh reiterated that there had been no direction from the Centre to do so. After the US decision to reimpose sanctions on Iran, the company had “no choice but to increase prices,” he said.