Indian Oil reports 174% spike in Q1 consolidated net at Rs 6,109.69 cr

Expects diesel demand to reach pre-Covid levels by Diwali

Indian Oil Corporation (IOCL) has reported a consolidated net profit (attributable to equity holders of the parent) of Rs 6,109.69 crore in the first quarter of FY22. This is 174 per cent higher than the Rs 2,226.80 crore consolidated net profit reported by the company in the same period of FY21.

Consolidated total income during the period under review stood at Rs 1,57,018.41 crore, up from Rs 90,775.15 crore in the quarter ending June 30, 2020.

“The higher profit is mainly on account of inventory gains and better petrochemical margins during the current period,” a company statement said.

“The gross refining margin or gain per barrel of crude oil processed stood at $6.58 per barrel in the period under review. This is up from (-)$1.98 a barrel in the same period of financial year 2020-21,” said IOCL Chairman Santosh Vaidya.

“The core GRM for current period after offsetting inventory loss/gain comes to $2.24 per barrel,” he added.

Commenting on fuel demand recovery, Vaidya said that he expects it to reach pre-Covid-19 levels by Diwali (November 4) this year. “Petrol demand has crossed the pre-pandemic levels; we are currently nearly 3-5 per cent more than pre-Covid levels. Diesel demand is around 88-90 per cent and I expect to get it back to pre-Covid levels by Diwali. We may have to wait till the end of the current financial year to get Aviation Turbine Fuel (ATF) to come back to its normal.”

Vaidya explained that this is because of preference for personal mobility. The demand for diesel remained down as public transport still remains restricted in parts of the country.

India’s fuel demand has not fully rebounded from Covid-19 lows. While Liquefied Petroleum Gas (LPG) consumption is well above 2019 levels, petrol, diesel and jet fuel trail. The higher LPG demand is presumably because of more people staying back home. Petrol, diesel and jet fuel consumption are lower as people continue to avoid inessential travel and commute.

Vaidya also said that joint venture between IndianOil and Malaysia’s Petronas will be expanded to cover more businesses. “Currently the business is only limited to LPG. We have now extended our cooperation to retailing petrol and diesel, as well as natural gas,” he said.

In response to queries from journalists, Vaidya said that there will be a separate branded fuel retailing outlets under the IndianOil-Petronas JV. He also said that the JV will enter the natural gas retailing business. Vaidya maintained that the IndianOil Petronas (IPPL) retail business would not be at the cost of IOCL’s market share.

Commenting on the current crude oil prices, he said that a price band of $60-70 a barrel will be better for India. Shares of IndianOil closed at Rs 103.20 a scrip, down by 0.67 per cent during trade on Friday.