Indian Oil Corporation Limited has reported a ₹ 716.82 crore net profit for the third quarter of financial year 2018-19, falling 90.91 per cent as compared to the ₹ 7,883.22 crore net profit reported during the corresponding quarter last year.

The lower profits are due to muted gross refinery margins on the back of inventory losses and poorer margins on motor spirit (petrol). During the October to December 2018 quarter, there was a nearly $ 30 fall in crude oil price. 

The three public sector companies - IndianOil, Bharat Petroleum and Hindustan Petroleum - also took a ₹ 1 per litre price cut of petrol and diesel in October. This hurt their margins as the centre wanted to cushion the impact of high crude oil prices on consumers.

Because of this, IOC’s gross refinery margins (a measure of the gain per barrel of crude oil refined) during the October-December 2018 fell to $ 5.83 per barrel as compared to $ 8.28 per barrel recorded in the corresponding period of the last financial year.

“Inventory loss during the quarter under review stood at ₹ 6,655 crore. Comparably, there was a ₹ 5220 crore inventory gain in the same quarter of financial year 2017-2018,” IOCL Director (Finance), A K Sharma said.

“There was also a hit due to fallen product prices. Margins in motor spirit (petrol) cracks fell to $ 2.5 a barrel during the quarter ending December 2018. This stood at $ 11 a barrel during the comparable quarter ending December 2017,” Sharma added.

For the third quarter of financial year 2018-2019, IndianOil's product sales volumes, including exports, was 22.794 million tonnes. The refining throughput was 18.982 million tonnes and the throughput of the company’s countrywide pipelines network was 23.083 million tonnes during the same period, a company statement said.

The reported revenue from operations of IndianOil stood at ₹ 1,60,138 crore in the third quarter of financial year 2018-2019 as compared to ₹ 1,30,876 crore in the corresponding quarter of financial year 2017-2018.

Related Topics