IOC net profit surges 17 fold to 5,294 crore

NEW DELHI: State-run Indian Oil Corp or IOC, the country’s largest fuel retailer , has reported a 17-fold jump in net profit for the quarter ended September 30 due to higher refinery margin and timely subsidy support from the government.

IOC’s net profit in the quarter is 5,294 crore compared to 284 crore in the same period previous year, IOC chairman BM Bansal said.
“The profit for the current quarter could be achieved mainly due to government compensation of 7,220 crore approved for both the quarters ,” he said.

Robust profit in the quarter is also due to increased refining margins, he added. IOC’s gross refining margin was $6.63 a barrel in the quarter compared to $3.62 a barrel in the same quarter last year.

But the company’s net profit in the first half of current financial year dropped by 52% at 1,905.5 crore even after the government’s support and 5,807 crore upstream contribution in the period.

Despite compensations IOC had to absorb 4,394 crore revenue losses in the first half for selling auto and cooking fuel at the government determined rates often below cost. The government and upstream companies such as ONGC and Oil India partially compensate state-run fuel retailers for selling diesel, kerosene and cooking gas below cost.

“IOC is losing 81 crore per day on sale of diesel, domestic LPG (cooking gas) and kerosene,” Mr Bansal said.
Company reported a 14.5% increase in its turnover at 74,757 crore in July-September quarter.