Home >Companies >IOC profit at Rs2,523 crore in June quarter; may cut petrol prices
Indian Oil earned $2.25 per barrel as gross refining margin, as against $2.66 per barrel in the same period last fiscal, chairman B. Ashok said. Sales rose 13.13% to Rs124,957 crore. Photo: Ramesh Pathania/Mint
Indian Oil earned $2.25 per barrel as gross refining margin, as against $2.66 per barrel in the same period last fiscal, chairman B. Ashok said. Sales rose 13.13% to Rs124,957 crore. Photo: Ramesh Pathania/Mint

IOC profit at Rs2,523 crore in June quarter; may cut petrol prices

IOC's revenue rose 13.63% to Rs1.25 trillion in the June quarter from Rs1.1 trillion in the year-ago period

New Delhi: Indian Oil Corp. Ltd, the nation’s largest oil refiner, reported a 2,523 crore profit in the quarter ended 30 June from a loss in the year-earlier period because of foreign exchange gains and lower interest expenditure and compensation from the government.

The firm had reported a loss of 3,093 crore in the quarter ended 30 June last year.

IOC, along with other state-run fuel retailers Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL), may cut petrol prices from the fortnight starting 16 August, said a government official requesting anonymity.

IOC’s revenue rose 13.63% to 1.25 trillion in the June quarter from 1.1 trillion in the year-ago period.

IOC reported a forex gain of 128 crore against a loss of 4,024 crore in the year earlier, chairman B. Ashok said. Also, there was a write-back of trust receivables of 343 crore and 556 crore saving on interest expenses due to lower borrowing.

Its current debt is at 68,953 crore, substantially lower than the 86,263 crore it had on 31 March because of lower losses from selling fuel below cost and the government paid it 12,700 crore as previous compensation for these losses.

IOC, which plans to add 2,000 retail outlets in the current fiscal to its current strength of 24,000, still had an unmet under-recovery of 1,145.50 crore for selling diesel, domestic cooking gas and kerosene at below-cost price to keep inflationary pressures under check. State-run refiners ran up a revenue loss of nearly 1.4 trillion in the last fiscal because of selling oil products at below production cost.

IOC’s gross refinery margin, or the revenue earned from processing a barrel of crude, fell to $2.25 in the first quarter from $2.66 in the year-ago period.

In response to a question on reducing petrol prices, Ashok said, “Petrol is a decontrolled product. We have to take a call. At the moment there are some positive indications."

In June 2010, the Centre partially deregulated fuel prices, allowing oil firms to fix the price of petrol instead of selling it at government-determined rates.

IOC said it was awaiting an alternative to the direct benefit transfer for LPG (DBTL) scheme in the backdrop of the suspension of direct gas subsidy transfers to bank accounts that are linked to Aadhaar numbers. “The S.G. Dhande committee set up for the review of DBTL scheme has submitted its report. It has recommended continuing with the scheme. In the meanwhile, no alternative has been spelt out," said M. Nene, director of marketing, IOC.

The Supreme Court had said in September that the government can’t make Aadhaar numbers mandatory for people to avail of benefits of government services and subsidies, including the direct benefit transfer scheme for delivery of subsidized cooking gas.

On Tuesday, shares of IOC rose 3.58% to 340.95 on BSE, while the exchange’s benchmark Sensex gained 1.42% to 25,880.77 points.

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