Low fuel demand drives IOC's pre-tax profit down 42% to Rs 3,204 cr in Q1

June quarter revenue down 41% to Rs 90,106 cr, GRM was minus (-) $1.98 a barrel as compared to $4.69 a barrel in the year-ago quarter

Indian Oil Corporation (IOC) on Friday reported a 42 per cent drop in consolidated profit before tax (PBT) at Rs 3,204.4 crore for the first quarter of the current financial year on low fuel demand.

The pre-tax profit of the country’s largest fuel retailer was Rs 5,482.35 crore during April to June period of 2019-20.  

The company’s revenue from operation for the second quarter was down 41 per cent at Rs 90,106.48 crore, against Rs 1.52 trillion in the year-ago period. 

The inventory loss for the quarter stood at Rs 3,196 crore, against a gain of Rs 2,362 crore during the first quarter of 2019-20. This translates to $3.05 a barrel loss during the quarter versus $3.92 a barrel gain during the same time last year. 

The gross refining margin (GRM) during the first quarter of 2020-21 was minus (-) $1.98 a barrel, compared to $4.69 a barrel in the same period a year ago. The core GRM for the current period after offsetting inventory loss/gain comes to $4.27 a barrel. The firm sold 16.504 million tonne (mt) of products, including exports, during the first quarter of the financial year 2020-21. Its refining throughput for the quarter was 12.930 mt and the throughput of the countrywide pipelines network was 15.017 mt during the same period.

The company recorded a 36 per cent decline in sale of petrol during the quarter and 35 per cent drop in sale of diesel compared to the same time last year, owing to the reduction in sales due to Covid-19 lockdown and restrictions. 

Pushed by the rise in sales due to the free liquefied petroleum gas (LPG) cylinders being distributed to Ujjwala consumers, sales of LPG registered double-digit growth of 15.2 per cent during the quarter. 

“In terms of sales and refining capacity, we will not be back to the normal in the near future. Our refineries are operating at 75 per cent capacity and I expect it to remain in that range of 70-75 per cent for the rest of the financial year,” said S M Vaidya, chairman of IOC. 

He said the company expected the international crude oil prices to be in the range of $40 a barrel during the second quarter and second half of the financial year.