CHENNAI: A substantial rise in crude oil prices gave Indian Oil Corporation’s net profit a solid boost in the quarter ended March 31, 2021, with the state-run oil refining and marketing major recording inventory gains of Rs 8,622.25 crore during the period. The company’s standalone net profit came in at Rs 8,791.9 crore for the quarter, compared to a net loss of Rs 5,185.32 crore during the corresponding period of last year and 49 per cent higher than the Rs 4,916.6 crore recorded in the previous quarter ended December 2020.
Inventory gains are made when the value of crude oil stored by the company rises in tandem with market prices, while inventory losses happen when market prices of the stored crude falls. Over the period under review, International Brent crude oil prices rose around 23 per cent. The result was a 52 per cent jump in inventory gains from the Rs 5,622 crore recorded during the previous quarter.
The company had recorded an inventory loss of Rs 744.6 crore in the corresponding quarter of the previous year. The company also recorded a robust rise in revenue at Rs 1.63 lakh crore against Rs 1.40 lakh crore in the corresponding quarter of last year and Rs 1.46 crore in the previous quarter ended December 2020.
Indian Oil’s gross refining margins (GRM), the amount of money the company makes from processing a barrel of crude, saw a jump during both the quarter and the full fiscal year—coming in at $5.64 a barrel in FY21 against $0.08 in FY20. In the March quarter, GRM stood at over $10, said IOC Chairman S M Vaidya.
On the impact of the second wave of the pandemic on fuel demand, Vaidya said that it has not been as severe as the first wave. “Demand destruction… is very much there but not to that extent,” he added. According to the chairman, the second wave so far has resulted in petrol and diesel demand falling by around 15-20 per cent compared to the 49 per cent plunge in April 2020 after imposition of the nationwide lockdown.