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Indian Oil Reports First Quarterly Loss In Four Years After Inventory Hit

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Indian Oil Corp Ltd, the country's top refiner, on Wednesday reported its first quarterly loss in more than four years in the March quarter, after a surge in inventory losses following a sharp fall in crude oil prices.

Chairman Sanjiv Singh said the fall in global prices impacted the group's financial performance for the January-March quarter as the company holds about 45 days inventory.

Inventory losses are booked when oil prices fall by the time a company processes oil into fuel. Brent crude oil prices fell 65.6 per cent during the March quarter.

Head of finance Sandeep Kumar Gupta said in January-March, Indian Oil registered inventory losses of Rs 14,692 crore, against a gain of Rs 2,655 crore a year earlier.

The state-owned company reported a fourth-quarter net loss of Rs 5,185 crore, compared with a profit of Rs 6,099 crore a year ago.

Indian Oil's March quarter gross refining margin - the difference between the cost of crude oil processed and the selling price of refined products - was minus $9.64 a barrel against $4.09 per barrel, a year ago.

India's fuel demand declined sharply towards the end of March as the government imposed coronavirus lockdowns.

Sales have picked up and crude processing has recovered, but analysts expect a full-scale recovery to pre-COVID-19 consumption levels in India to be months away.

Chairman Singh said India's fuel demand was recovering faster than expected and was expected to recover close to pre-COVID 19 levels by the end of 2020.

The company is currently operating its refineries at about 90 per cent capacity and hopes to scale up operations to 100 per cent by end-July, head of refineries Shrikant Vaidya said.

IOC, along with its Chennai Petroleum subsidiary, controls about a third of country's five million-barrels-per-day refining capacity.

Source: NDTV

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