Fuel demand to remain lower than pre-Covid-19 levels in fiscal 2020-2021: Indian Oil

Our Bureau New Delhi | Updated on July 31, 2020 Published on July 31, 2020

Indian Oil Corporation Ltd has reported a ₹2,350.25 crore consolidated net profit for the first quarter of FY20-21

Company reports lower profit and revenue on COVID-19 hit in Q1

Indian Oil Corporation Limited (IOCL) expects auto fuel demand for the current financial year 2020-2021 to remain considerably lower than pre-COVID-19 levels.

Speaking to reporters after declaring the quarterly results, IOCL Chairman, Shrikant Madhav Vaidya said, "Our capacity utilisation had increased to 93 per cent in the first week of July 2020. But it has now come down to 75 per cent due to extended lockdowns in states...we do not see demand for auto fuels to regain to pre-COVID-19 levels in the near future."

Vaidya said that he expects the IOCL Group's capacity utilisation to be maintained at 70-75 per cent for the full financial year 2020-2021. IOCL is India's largest fuel retailer and alone caters to nearly half of the country's demand.

Commenting on expansion plans and possible growth drivers, Vaidya said that he expects petrochemicals demand to remain robust. He also said that the IOCL Board has approved setting up a ₹ 13,800 crore Purified Terephthalic Acid (PTA) plant in Paradip.

Quarterly Results

IOCL has reported a ₹2,350.25 crore consolidated net profit for the first quarter of financial year 2020-2021. This is lower than the ₹3,623.69 crore consolidated net profit reported by the company in the same quarter of the previous financial year.

Consolidated total income for the period under review stood at ₹90,776.10 crore, significantly down from ₹1,53,111.43 crore consolidated total income and in same quarter of the fiscal 2019-2020.

IOCL reported an inventory loss of ₹3,196 crore in the first quarter of fiscal 2020-2021. The group had reported an inventory gain of ₹2,362 crore in the comparable quarter of 2019-2020.

On a per barrel basis, inventory loss during the first quarter of 2020-2021 stood at $3.05 barrel compared to an inventory gain of $3.92 a barrel in the same period a year ago.

After the inventory hit, the gross refining margin (GRM) or gain per barrel of crude oil processed during the first quarter of financial year 2020-2021 was $1.98 a barrel. This is lower when compared to $4.69 a barrel in the same period of the previous financial year.

“The revenue of the holding company and other consequential expenses during the period is decreased due to nationwide lockdown for Covid-19. The holding company's sales during the month of April 2020 was impacted significantly by the nationwide lockdown and consequently capacity utilization of the plants were lower,” IndianOil said in a statement to the BSE.

“The same has come back close to normal levels by the month of June 2020…The holding company is positive on the long-term business outlook as well as its financial position. However, the holding company is closely monitoring any material changes to future economic conditions,” the statement added.

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Published on July 31, 2020
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