With strong refining margin and lower inventory losses, Indian Oil Corporation (IOC) posted its net profit at Rs 3,056.86 crore in the December quarter earning this fiscal as against a net loss of Rs 2,636.80 crore in the same period a year ago, according to IOC Chairman B Ashok.
“Besides performance improvement, especially in petrochemical businesses, the profit is mainly because of lower inventory losses. The company’s inventory loss came down to Rs 4,477 crore in October-December 2015, from Rs 12,840 crore in the previous fiscal. Inventory losses arise when the company buys oil at a price, but by the time it ships crude to India and processes the same into fuel, the rates would have fallen, lowering the value of the inventory,” Ashok told reporters here.
However, IOC earned $5.96 on turning every barrel of crude oil into fuel compared with a negative gross refining margin (GRM) of $7.73. Excluding inventory losses, GRM in October-December should have been $10.97 per barrel as against $10.47 a year ago.