PremiumState run Indian Oil Corporation Ltd (IOC) on Wednesday said its capacity utilization, which had reached 100% in last November, has come down to 84%, as states across the country have imposed lockdowns.
The fuel demand in India has again dipped with several states imposing lockdowns amid a second wave raging across the world’s third-largest oil importer and the fourth-largest buyer of liquefied natural gas.
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Capacity utilization at IOC, the country’s largest oil refiner, had shrunk to around 35% at the beginning of the lockdown during the first wave of the pandemic last year, due to India’s petroleum product demand nosediving. India had imposed the world’s largest and strictest lockdown last year to contain the virus that originated in Wuhan, China.
IOC on Wednesday announced a net profit of ₹8781.30 crore for the last quarter of financial year (202-21), compared to a ₹5,185.32 crore loss registered in the corresponding period of 2019-20 financial year. This was account of higher petroleum product sales and inventory gain. The firm also declared a final dividend of ₹1.50 per equity share.
Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April last year during the first wave before recovering to $63.40 a barrel in April, data from the Petroleum Planning and Analysis Cell showed.
India’ largest fuel retailer posted a huge jump in its annual profits to ₹21,836 crore for 2020-21 financial year, as compared to ₹1,313 crore posted in 2019-20 due to higher inventory gains and petrochemical margins. However, there was a 9.08% dip in annual revenue to ₹5,14,890 crore for 2020-21 financial year as compared to ₹5,66,354 crore posted in 2019-20.
The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was at $68.69 a barrel on 18 May. Brent crude had hit a 21-year low and the US oil futures slumped to negative for the first time in April last year as the glut induced by worldwide lockdowns overwhelmed the world’s limited storage facilities, triggering massive selling by traders.
Addressing reporters on Wednesday at Indian Oil Corporation’ annual results press conference, chairman, S.M. Vaidya said, “IndianOil sold 81.027 million tonnes of products, including exports, during the year April – March 2021. Our refining throughput for the FY 2020-21 was 62.351 million tonnes and the throughput of the Corporation’s countrywide pipelines network was 76.019 million tonnes during the year."
IOC also posted higher refining margins. The gross refining margin— the difference between the cost of processing crude and the revenue earned from the sale of finished products—was $5.64 per barrel for the April-March 2021 period against $ 0.08 per barrel in the previous financial year.
This comes at a time when transportation fuel prices have been increasing in India since the results for the assembly elections in West Bengal, Assam, Kerala, Tamil Nadu, and Puducherry were announced on 2 May. State run oil marketing companies have been raising petrol and diesel prices.
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