Photo: Reuters
Photo: Reuters

Singapore GRMs dip, RIL margins to follow suit

Reliance Industries is set to announce its second quarter results on Friday

Mumbai: After two strong quarters, benchmark Singapore gross refining margins (GRMs) declined in the September quarter to $6.3 per barrel. In the June quarter, the measure had stood at $8 a barrel.

Most refiners are expected to follow the same trend in their September quarter earnings, starting with Reliance Industries Ltd (RIL), which is set to announce its second quarter results on Friday.

Having said that, RIL’s complex refinery enables it to report a premium to Singapore margins and the September quarter should be no different. Analysts expect the company’s GRM to be around $9 per barrel last quarter.

Kotak Institutional Equities points out in its results preview, RIL’s refining margins will indeed reflect a higher premium over benchmark margins due to higher share of light distillates in the company’s product yield and favourable crude/ fuel oil spreads.

In the June quarter, RIL’s GRM stood at $10.4 a barrel, which was the highest in the last six years, according to the company.