INDIA’S largest petroleum refiner reported losses for the last quarter of FY08 as losses in marketing of petroleum products grew substantially. The company has to sell four products — petrol, diesel, LPG and kerosene — below cost despite rising crude oil prices. Thus its marketing division continues to suffer heavy under-recoveries. The last time IOC reported a quarterly net loss was way back in December 2005. Although the problem of under-recoveriaes has persisted since then, factors such as oil bonds, discounts from upstream companies, profits in refining or extraordinary gains had come to the rescue of the company to avoid slipping into the red.
However, this time under-recoveries were too high to be compensated by the other sources of income. The oil bonds received by IOC during the quarter ended March 2008 jumped 145% to Rs 7,536 crore, while the discounts received from ONGC, Oil India and Gail increased by 58% to Rs 5,376 crore. IOC’s refining business also put up a strong performance as the gross refining margins (GRMs) up by nearly 50% compared to last year and refinery throughput volumes rose by around 4%. Refining margins have improved thanks to higher proportion of sour and heavy grades of crude oil in the total mix.
The overall physical performance of the company was better than last year. IOC’s seven refineries put together reported over 100% capacity utilisation level. The sales grew 8% to 59.3 million tonnes. Exports were up 6% to 3.33 million tonnes. The utilisation of pipelines improved thanks to 11% growth in the pipeline throughput volumes to 57.12 million tonnes.
For the year ended March 2008, the company reported net profits of Rs 5,889.6 crore on a standalone basis thanks to oil bonds worth Rs 18,997 crore received during the year. On a consolidated basis, the performance of the company was slightly better thanks to the substantially improved performance of its subsidiaries such as Chennai Petroleum and Bongaigaon Refinery. On a consolidated basis, the PAT stood at Rs 7,912.7 crore on revenue of Rs 2,089,48 crore.
The company spent Rs 4,900 crore by way of capital expenditure during FY08, half of which went into petrochemicals. The company’s sales of linear alkyl benzene (LAB) spurted 34% to Rs 935 crore with sales volumes touching 1,360,00 tonne. Similarly, the company completed its first full year of operations of a purified terephthalic acid plant at Panipat with sales exceeding 3,75,000 tonnes, generating Rs 1,525 crore.
IOC currently has projects worth over Rs 50,000 crore under various stages of implementation. These include laying pipelines for transportation of crude as well as products, upgradation of refineries, capacity augmentation and a naphtha cracker at Panipat. The planned capex also includes a 15 million tonne per annum refinery at Paradip at a capex of over Rs 25,000 crore, which is expected to be commissioned by 2012. At present, the company is losing around Rs 16.3 per litre of petrol, Rs 23.5 per litre of diesel, Rs 28.7 per litre of kerosene and Rs 306 per cylinder of LPG sold to domestic consumers. This has resulted in worsening its profits as well as cash position. Hence, Indian Oil’s current results give cues of worse results from other oil PSUs like HPCL and BPCL.
However, this time under-recoveries were too high to be compensated by the other sources of income. The oil bonds received by IOC during the quarter ended March 2008 jumped 145% to Rs 7,536 crore, while the discounts received from ONGC, Oil India and Gail increased by 58% to Rs 5,376 crore. IOC’s refining business also put up a strong performance as the gross refining margins (GRMs) up by nearly 50% compared to last year and refinery throughput volumes rose by around 4%. Refining margins have improved thanks to higher proportion of sour and heavy grades of crude oil in the total mix.
The overall physical performance of the company was better than last year. IOC’s seven refineries put together reported over 100% capacity utilisation level. The sales grew 8% to 59.3 million tonnes. Exports were up 6% to 3.33 million tonnes. The utilisation of pipelines improved thanks to 11% growth in the pipeline throughput volumes to 57.12 million tonnes.
For the year ended March 2008, the company reported net profits of Rs 5,889.6 crore on a standalone basis thanks to oil bonds worth Rs 18,997 crore received during the year. On a consolidated basis, the performance of the company was slightly better thanks to the substantially improved performance of its subsidiaries such as Chennai Petroleum and Bongaigaon Refinery. On a consolidated basis, the PAT stood at Rs 7,912.7 crore on revenue of Rs 2,089,48 crore.
The company spent Rs 4,900 crore by way of capital expenditure during FY08, half of which went into petrochemicals. The company’s sales of linear alkyl benzene (LAB) spurted 34% to Rs 935 crore with sales volumes touching 1,360,00 tonne. Similarly, the company completed its first full year of operations of a purified terephthalic acid plant at Panipat with sales exceeding 3,75,000 tonnes, generating Rs 1,525 crore.
IOC currently has projects worth over Rs 50,000 crore under various stages of implementation. These include laying pipelines for transportation of crude as well as products, upgradation of refineries, capacity augmentation and a naphtha cracker at Panipat. The planned capex also includes a 15 million tonne per annum refinery at Paradip at a capex of over Rs 25,000 crore, which is expected to be commissioned by 2012. At present, the company is losing around Rs 16.3 per litre of petrol, Rs 23.5 per litre of diesel, Rs 28.7 per litre of kerosene and Rs 306 per cylinder of LPG sold to domestic consumers. This has resulted in worsening its profits as well as cash position. Hence, Indian Oil’s current results give cues of worse results from other oil PSUs like HPCL and BPCL.
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