NEW DELHI: After a tepid FY23, the PSU oil marketing companies have turned the table and raked in record profits in FY24. The three state-owned oil marketing companies (OMCs) – IOCL, BPCL and HPCL – have together posted `82,500 crore standalone profit in 2023-34, 71 times the profit earned in the previous year.
This is significant because these companies have been holding fuel price cuts citing low profitability. Experts cite robust double-digit gross refining margins (GRM) and healthy marketing margins on high speed diesel (HSD) and petrol for most part of the year. Prashant Vasisht, senior vice-president and co-group head, corporate, ICRA, also attributes high profitability to low base effect. “The profits were significantly weaker in FY23 owing to negative marketing margins on HSD and petrol for a large part of the year,” he says.
Stable crude oil prices have also helped the OMCs maintain their GRM, even though they came down by a few basis points vis-à-vis previous year.
Indian Oil Corporation, the country’s largest oil marketing company, achieved its highest-ever net profit of Rs 39,618.84 crore in 2023-24. However, quarterly profits saw a significant decline, in the January to March quarter, the company’s net profit stood at Rs 4,837.69 crore, compared to Rs 10,058.69 crore the previous year and Rs 8,063.39 crore in the preceding quarter.
The company’s gross refining margin (GRM) also dropped to $12.05 per barrel in 2023-24 from $19.52 a year ago, attributed to lower refining margins, a negative performance in the petrochemical segment, and price cuts despite rising crude oil costs. Currently, Brent Crude Future was trading at $83.94 a barrel at 7.54 IST.
Hindustan Petroleum Corporation Ltd (HPCL) also reported impressive financial results in FY24, with a record net profit of Rs 14,600 crore compared to a loss of Rs 8,974 crore in the previous year. However, HPCL also experienced a decrease in quarterly profits. In the January-March quarter, HPCL’s net profit was Rs 2,709.31 crore, down from Rs 3,608.32 crore in the same period of the previous financial year.