NEW DELHI: State-run oil marketing company (OMC) Indian Oil Corporation Ltd (IOCL) on Friday reported a massive eleven-fold jump in its standalone net profit for the second quarter-earnings soaring to Rs 6,227.31 crore from Rs 563.42 crore in the second quarter of last year.
The company’s balance sheet shows the spike in profit was driven primarily by a large inventory gain, a sharp rise in refinery margins, and a cut in expenditure. Revenue from operations reflected the impact on demand due to the pandemic, falling to Rs 1.15 lakh crore during the quarter compared to Rs 1.32 lakh crore a year ago. However, company officials say that demand is fast returning to normal.
Having bought a substantial amount of crude oil during the summer, when prices had hit record lows, IOCL accrued an inventory gain of Rs 7,400 crore during the second quarter, compared to an inventory loss of Rs 1,807 crore in the corresponding period of the previous year. It also earned $8.62 on turning every barrel of crude oil into fuel, or gross refining margin (GRM), compared to a GRM of just $1.28 last year.
IOCL also had a foreign exchange gain of Rs 672 crore during the quarter compared to a loss of Rs 1,135 crore a year ago. According to IOCL Chairman Shrikant Madhav Vaidya, petrol demand has already breached the pre-Covid level, while diesel demand was just 0.5 per cent lower than normal during the month of October. “We expect the two transportation fuels to come back to pre-COVID-19 levels within a month,” he told reporters.
However, aviation turbine fuel (ATF) demand continues to be just 48-50 per cent of normal since the commercial aviation sector is still not operating at full capacity. “Other than that, the situation is looking better,” Vaidya said.
