Indian Oil's quarterly profit jumps as refining margin doubles

NEW DELHI: State-owned Indian Oil Corp posted a 50% jump in quarterly profit as the margin for converting crude into fuels more than doubled.

Net income climbed to 68.3 billion rupees (US$992mil) in the quarter ended June 30, from 45.5 billion rupees a year earlier, the company said in a stock-exchange filing Saturday.

That compares with the 53.3 billion-rupee average of 20 estimates compiled by Bloomberg. Sales rose 16% to 1.5 trillion rupees.

India’s largest refiner has taken advantage of rising domestic oil consumption, which expanded for a 10th straight month in June, as vehicle sales surged and economic activity picked up.

The Mumbai-based company is locking in future supplies and said this month it signed a term tender to purchase American oil for delivery every month between November and January as US President Donald Trump seeks to squeeze Iran exports. Indian Oil earned US$10.21 for every barrel of crude it turned into fuel in the quarter compared with US$4.32 a year earlier. A weaker rupee also helped since the refiner’s products are priced mostly in dollars but it reports earnings in rupees. The rupee averaged about 67.06 for a dollar in the quarter ended June, 4% lower than a year ago.

Brent crude, the global benchmark, averaged about US$75 a barrel in the quarter ended June, up from about US$51 a barrel a year earlier.