Indian Oil Corporation (IOC) on Wednesday reported a net loss of Rs 5,185 crore in the quarter ended March 31, 2020, down from a net profit of Rs 6,099 crore in the year-ago period, due to large inventory losses and lower refining margins. Net profit for FY20 ended at Rs 1,313 crore, compared to a net profit of Rs 16,894 crore in FY19.
The state-owned oil marketing company (OMC) recorded an inventory loss of Rs 14,692 crore in Q4 FY20, as against inventory gains of Rs 1,787 crore in the corresponding period in FY19. IOC had to write-down inventories as a result of a sharp decline in the price of crude oil precipitated by a price was between oil-producing countries and reduced demand due to the COVID-19 pandemic.
The gross refining margin, or the difference between the cost of crude and total value of petroleum products from refining, fell to $0.08 per barrel in FY20 from $5.41 in the previous fiscal.
IOC Chairman Sanjeev Singh said that demand for petroleum products fell by as much as 70 per cent during the lockdown to prevent the spread of COVID-19 and had recovered to about 80-85 per cent of pre-COVID levels.
On the recent spike in the prices of petrol and diesel, Singh said, “Whatever price rise we are seeing is because of the international movement of the product prices,” noting that it was likely that prices may move up further. OMCs have hiked the price of petrol and diesel by Rs 8.5 and Rs 10.5, respectively, in the past 18 days.
Singh added that the decision to halt revisions in prices of petrol and diesel for 82 days from March 16 was taken as the fall in international prices would have led to negative margins for IOC if normal guidelines, which price domestic fuels on the basis of international prices, were followed. “When margins were negative, following standard guidelines was not workable,” he said.
IOC’s revenue from operations was Rs 5,66,950 crore for FY20, compared to Rs 6,05,932 crore in FY19.
“Indian Oil sold 89.696 million tonnes of products, including exports, during the financial year 2019-20. Our refining throughput for FY19-20 was 69.419 million tonnes and the throughput of the Corporation’s countrywide pipelines network was 85.349 million tonnes during the year,” Singh said.
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