Indian Oil today reported a massive ₹5,185 crore loss in the March quarter as against ₹6,099.27 crore net profit in the same period a year back. State-owned Indian Oil Corp (I,e, IOC) reported that a massive ₹5,185 crore loss on Wednesday in the March quarter after a slump in oil prices resulted in record inventory losses for the company as well. The net loss of ₹5,185.32 crores in January-March compared to ₹6,099.27 crore net profit in the same period a year back, IOC Chairman Sanjiv Singh told reporters here. The loss was primarily because of the inventory losses and also lower refining margins.
The company recorded that an inventory loss of around ₹14,692 crores in the fourth quarter of 2019-20 as compared to an inventory gain of around ₹1,787 crores in the same period a year back, as he told. An inventory loss is likewise recorded when a company buys raw material at a particular price but then by the time it is shipped and also processed into fuel, rates have fallen. Additionally, since retail prices are benchmarked to prevailing international prices, an inventory loss is also recorded. In the case of the reverse, an inventory gain is booked.
The company, which had earned around USD 4.09 on turning every barrel of the crude oil into fuel in January-March 2019, posted a negative gross refining margin of around $ 9.64 per barrel. After excluding inventory losses/gain, the GRM for Q4 FY20 was $2.15. Singh told fuel demand, which had evaporated by as much as of 70% following the corona virus lockdown grounding most land and air transport, have returned to around 80-85% and is likely to reach 90% by the month-end or in the first half of July.
Petrol demand has been arisen unexpectedly and possibly because of the most public transport is still off roads and also private vehicles are being used for the commuting. Diesel demand is so also picking up on the increased rural activity and the goods transportation. Although, the demand may reach full pre-COVID levels only by the end of the year whenever industrial and aviation demand picks up, as he told.