IOC posts net loss of Rs 1,993 cr in Q1 on fuel discounts, higher costs

Indian Oil Corp Ltd on Friday reported a standalone loss for the first quarter, as the country’s top refiner sold fuel at a discount in the domestic market while its costs jumped.

Indian fuel retailers such as IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp have not revised pump prices for months to insulate consumers from the global crude price surge, helping the government’s efforts to mitigate the impact of inflation.

State refiners have had to step up domestic sales of fuel and have suffered marketing losses despite buying cheaper Russian crude as private refiners reduced their share to focus on exports due to higher margins.

State-owned Indian Oil’s net loss was Rs 1,993 crore for the quarter ended June 30 compared with a profit of Rs 5,941 billion crore a year earlier.

Revenue from operations surged about 63% to Rs 2.52 trillion, while expenses jumped about 73% to Rs 2.55 trillion.

The company said its gross refining margin, or profit from converting a barrel of oil into refined products, was $31.81 per barrel in the three months to June, compared with $6.58 per barrel a year earlier.The core margin, after offsetting inventory losses, was $25.34 per barrel.

“However, the suppressed marketing margins of certain petroleum products have offset the benefit of an increase in GRM,” the company said in notes to its accounts.

Indian refiners’ crude processing remained resilient in June, holding above pre-pandemic levels amid steady demand, while production eased with the increased availability of cheaper Russian crude.

Indian Oil, along with its unit Chennai Petroleum, controls about a third of India’s five million-barrels-per-day refining capacity.

On Friday, the company’s scrip on BSE closed 0.8% higher at Rs 72.65.

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