IndianOil Q4 net profit surges 40% to Rs 5,218 cr

Net profit of Rs 5,218 crore, or Rs 5.51 a share, in the January-March period compared with Rs 3,720.62 crore, or Rs 3.93 a share, net profit in the same quarter of the preceding financial year, IOC Chairman Sanjiv Singh told reporters here.

The company earned $9.12 on turning every barrel of crude oil into fuel in the fourth quarter of 2017-18 fiscal as compared to $8.95 per barrel gross refining margin a year ago.

Besides, the company made an inventory gain of Rs 3,442 crore during the quarter.

Inventory gain arises when a company buys oil at a price but by the time it is able to transport it to refinery, process it and turn it into fuel, the rates move up. Since retail prices are ?decided on the rate prevalent on the day of sales, there is an inventory gain. There would be an inventory loss if the reverse happen.

IOC's turnover rose to Rs 1.36 lakh crore in the fourth quarter of last financial year ended March 31, from Rs 1.24 lakh crore in the year-ago period, he said.

The company sold 20.8 million tonnes (MT) of petroleum products during the last quarter of 2017-18, higher than 19.64 MT domestic sales a year-ago. Exports too were up at 1.76 MT from 1.46 MT. The Board of the company recommended a final dividend of Rs 2 per share (20 per cent on the paid up equity share capital) for the financial year 2017-18.

This is in addition to the interim dividend of Rs 19 per share paid earlier. For the full year, net profit was at an all time high of Rs 21,346 crore on a turnover of Rs 5.06 lakh crore. This compares with a net profit of Rs 19,106 crore on turnover of Rs 4.45 crore in 2016-17.

Meanwhile, addressing an issue that has come under sharp focus since oil prices started a relentless climb nine days ago, Indian Oil Corporation said on Tuesday that there was no directive from the government to cap oil prices in the run-up to the Karnataka elections.

IOC chairman Sanjeev Singh said it was an internal decision of the firm to "moderate" the prices "because we were expecting them to fall".

"The government has given us the freedom to revise prices daily. We are following that formula. We took a call (in those 19 days)... we believed that the trends that were happening were not supported by fundamentals," Singh told reporters Tuesday evening.

Blaming the international rise in crude oil prices on fresh US sanctions on Iran, he said the company cannot operate if prices don't match global prices. Under the circumstances, he said they had "no choice but to increase prices".

Singh, however, indicated that there was no room to tinker with prices from the firms' end.

"We are not making extra money on high price. This isn't extra money going into the company's kitty. The company doesn't operate at high profit margins. It is a complete call that has to be taken by stakeholders," he said.

Regarding the demand by a section of the opposition that instead of the super-high excise duty, the flagship Goods and Services be applied, he said he too, was for it.