Indian Oil Corporation has reported a three-fold jump in net profit during the April-June quarter of 2021 because of higher margins from the refining business and inventory gains.
The PSU behemoth said its joint venture with Malaysia’s Petronas would diversify into natural gas and fuel retailing. The two decade-old joint venture, Indian Oil Petronas Pvt Ltd (IPPL), at present sells LPG to commercial customers at market rates.
In the first quarter, IOC’s standalone net profit was Rs 5,941.37 crore against Rs 1,910.84 crore a year ago when the pandemic hammered fuel demand and squeezed margins.
The profit was down 32 per cent in comparison with the preceding quarter, mostly because of the second wave of the coronavirus.
IOC chairman Shrikant Madhav Vaidya said the company earned $6.58 on turning every barrel of crude oil into fuel in the June quarter compared with a loss of $1.98 per barrel in the same period last year.
The refining margins included a component of inventory gain, IOC director (finance) Sandeep Gupta said without elaborating. Revenue from operations was up 74 per cent at Rs 1.55 lakh crore from a year ago.
Petronas pact
Vaidya said IOC and Petronas have not finalised the details of the new arrangement. IOC owns 32,303 out of 77,709 petrol pumps in the country. It also has licences to retail CNG to automobiles and piped cooking gas to households in several geographical areas. IPPL will have its own branding and marketing.
The IOC chairman ruled out the possibility of IPPL cannibalising on IOC’s business. India’s energy demand is growing and will have space for all players. “The energy pie is increasing. There is place for everybody. IOC’s market share is intact and IPPL will capture new opportunities,” Vaidya said.
The government, meanwhile, has launched bids for 75 small oil fields with discovered reserves across 32 areas in 11 basins and locations. The estimated hydrocarbons is approximately 232 million tonnes of oil and oil equivalent gas.
In the earlier two rounds, the government had awarded 54 contracts to 27 companies including 12 new entrants.
