The Hindu Business Line : IndianOil may post higher gross refining margin

Kolkata, June 27 IndianOil is set to post a higher gross refining margin of over $10 a barrel during the first quarter of this fiscal. The company recorded an average margin of $9 a barrel during the corresponding period last year.

While refining margin can only compensate part of the Rs 80-crore marketing loss a day of the company, IndianOil is better placed this year compared with the first quarter of the previous year when it was losing at the range of Rs 100 crore a day.

Price Fluctuations

Explaining the reasons behind posting a better margin, IOC sources said that apart from product price fluctuations, the investments made in the refineries for greater usage of cheaper crude and increase in yield had finally started yielding results.

IOC is now using close to 45 per cent cheaper high sulphur crude up from 30-35 per cent. Meanwhile, the company has launched motor spirit (petrol) quality upgradation programme in all its refineries to meet the requirements for Euro-II and Euro-IV grade petrol in 2009-10 following the auto-fuel emission norms.

While the project was already launched in Haldia, Mathura, Panipat refineries and Koyali refineries, the company has recently introduced the same in smaller refineries such as Barauni, Digboi and Guwahati. The total estimated investment in the project in the three refineries is approximately Rs 1,400 crore.

Protection Norms

IOC will also approach the Union Ministry for Environment and Forests for permission to commission a distillate yield improvement project in Mathura refinery by September-October.

The refinery is now governed by strict environment protection norms due to its proximity to Taj.