Indian Oil Corporation (IOC) has reported a three-fold rise in net profit during the April-June quarter of 2021 on account of higher margins from the refining business and inventory gains. Standalone net profit of Rs 5,941.37 crore in April-June was up 210% when compared with Rs 1,910.84 crore a year earlier when lockdowns due to the COVID-19 pandemic hammered fuel demand and squeezed margins.
The profit was down 32% in comparison to the preceding quarter, mostly because of mobility being hit by the onset of the second wave of COVID-19 in April and May, the company's stock exchange filing showed. Sharing details to media on the earnings, IOC Chairman Shrikant Madhav Vaidya said the company earned USD 6.58 on turning every barrel of crude oil into fuel in June quarter. This is compared with a loss (negative gross refining margin) of USD 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. Inventory gains arise when crude oil is bought at a particular price but by the time it is shipped to India and processed into fuel, rates would have gone up.