Global oil volatility, geopolitical tensions drag RIL exports to 5-qtr low

RIL's exports are at a five-quarter low in value terms, and a 15-quarter low as share in O2C revenues

The global oil market has been volatile ever since the pandemic, with multiple geopolitical tensions in quick succession.

Reflective of this, Reliance Industries’ (RIL) exports in the latest quarter has hit multi-quarter lows, both in terms of absolute value and as a share in its oil-to-chemicals (O2C) revenue.

In the September-2024 ended quarter, RIL reported exports worth Rs 70,631.00 crore. This, the company, said is 16 per cent lower from a year ago. Data collated by Business Standard from past disclosures shows RIL’s Q2 exports are now at a five-quarter low.

An email query sent to Reliance Industries remained unanswered.

 

“RIL has two refineries of nearly equal capacity. The first is in the domestic tariff area, which is configured to produce petrochemicals, mostly catering to the Indian market. The second is the SEZ refinery, which mostly produces transportation fuels. This quarter saw a revenue impact on transport fuel due to lower crude oil prices and gross refining margins (GRMs),” said an analyst.

He added, “Since petrochemicals margins did not fall as much as crude oil prices plus GRMs, the share of exports to total O2C revenue is down.”

RIL’s exports are reported under its O2C division business. It comprises refining, petrochemicals and fuel retail. In Q2FY25, RIL’s O2C division reported a 5.1 per cent rise in revenue at Rs 1.55 trillion. Of this revenue, the share of exports was 45.40 per cent.

In its latest presentation for the Q2 financial performance, the management noted, “India’s downstream exports are likely to be affected by lower demand from developed markets like the US and EU.”

Further, in a call with analysts last week, V Srikanth, chief financial officer, RIL, had said, “We also focused a lot on placing our products through the domestic fuel retailing market.”

Data collated from past disclosures shows exports’ share in RIL’s O2C division revenue is also dipping. It hit a 15-quarter low in Q2FY25.

The last time exports’ share in RIL’s O2C revenue was below 45.40 per cent was in the December-2020 quarter, at 37.64 per cent.

RIL gets Rs 2.03 cr Customs notice
 

Reliance Industries (RIL) on Saturday said the company has received an order dated October 16, 2024  passed by the Commissioner of Customs, Chennai - IV levying on the company a redemption fine and penalty aggregating Rs 2.03 crore. RIL said the order has been passed on the basis that the company has discharged a lesser custom duty by incorrectly availing benefits under notification issued under the Customs Act, 1962. RIL said the  company intends to file an  appeal against the order.