Beating estimates, State-owned oil retailer Indian Oil Corp (IOC) on Tuesday posted nearly a two-fold net profit at Rs 7,883.22 crore for the third quarter ended in December versus the same period last year.

The company's net profit grew mainly due to higher sales and refining margins. Net profit in October-December this fiscal stood at Rs 16.63 per share as compared Rs 8.43 a share in the same period a year ago, according to IOC Chairman Sanjiv Singh.

The oil major also declared a 1:1 bonus share (one free share for every existing equity share of Rs 10 each). The Board of Directors also declared an interim dividend of Rs 19 per share.

“The variation in net profit is largely due to higher inventory gains as well as improved operative performance,” the IOC chief said.

On skyrocketing petrol and diesel prices in India,  Singh also said that it is, to a large extent, aligned to international rates. Responding to the charges of Government meddling in fixing of fuel prices, he said, “The prices are revised daily based on 15-day rolling average rate of their international benchmark.”

The company booked an inventory gain of Rs 6,301 crore in the quarter ended December 31, 2017 as compared to a gain of Rs 3,051 crore in the same period a year ago. Inventory gain arise when a company buys crude oil at a particular price but by the time it is able to process it and take the fuel to market, the rates had moved up.

International oil prices have risen more than 30 per cent since OPEC and non-OPEC producers agreed to limit production from January 2017. Singh, however, said the company made $12.32 on turning every barrel of crude oil into fuel in the quarter as compared to a gross refining margin or GRM of $7.67 per barrel in the previous fiscal.

Without the inventory gain, the GRM was $7.42 in October-December as opposed to $5.10 in the previous fiscal.

IOC Director (Finance) AK Sharma said topline was impacted by about Rs 700 crore due to non-inclusion of crude oil, natural gas, petrol, diesel and ATF in the new GST regime.

“The company pays GST on inputs but is not able to set the tax off on the final product. On an annualised basis, the hit would be about Rs 2,000 crore,” he said.

“We have requested the Government to include petroleum and petroleum products in GST and till such time a mechanism be worked out to compensate us for the tax paid without input set off,” he said.