Indian Oil Corp (IOC), the country’s largest fuel retailer, on Tuesday reported a 40% year-on-year jump in its profit to Rs 5,218 crore for the quarter ended March 2018 as it gained from inventory gains due to rising fuel prices.
Net profit of Rs 5,218 crore, or Rs 5.51 a share, in the January-March period, compared with Rs 3,720.62 crore, or Rs 3.93 a share, net profit in the same quarter of the preceding financial year, IOC chairman Sanjiv Singh said.
The gross refining margin (GRM) of the company during the fourth quarter stood at $9.12 as compared to $8.95 per barrel a year ago.
Besides, the company made an inventory gain of Rs 3,442 crore during the quarter. It was Rs 2,634 crore in the year-ago period.
Inventory gain arises when a company buys oil at a price but by the time it is able to transport it to refinery, process it and turn it into fuel, the rates move up. Since retail prices are decided on the rate prevalent on the day of sales, there is an inventory gain. There would be an inventory loss if the reverse happens.
Analysts tracking the sector said that the Q4 2018 profit looks remarkable in comparison to the corresponding quarter last year because at that time (last year) there was a one time cost of wage hike. “However, the recent 19-day no-change in daily pricing of automotive fuel prior to the Karnataka elections earlier this month will reflect only in the next quarter.” said an analyst.
IOC’s turnover rose to Rs 1.36 lakh crore in the fourth quarter of last financial year ended March 31, from Rs 1.24 lakh crore in the year-ago period, he said.
The company sold 20.8 million tonne (mt) of petroleum products during the last quarter of 2017-18, higher than 19.64 mt domestic sales a year-ago.
INVENTORY GAINS
- GRM of the company during the fourth quarter stood at $9.12
- The company made an inventory gain of Rs 3,442 crore during the quarter
- IOC’s turnover rose to Rs 1.36 lakh crore in the fourth quarter of last financial year
— With PTI inputs
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Besides, the company made an inventory gain of Rs 3,442 crore during the quarter. It was Rs 2,634 crore in the year-ago period.
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