In a shocking development, Maharatna PSU IOCL (Indian Oil Corporation Limited) accepted that its March quarter net profit had decreased by 50 per cent — largely because of losses in the petrochemical business and shrinking margin after it announced a pre-election fuel price cut despite rising input costs.
The data read that the net profit for the quarter of January-March was just Rs 4,837.69 crore compared to Rs 10,058.69 crore a year back and Rs 8,063.39 crore in the preceding October-December quarter!
Such a dismal rate of return can be attributed to lower refining margins, the petrochemical segment turning negative, and cutting the petrol and diesel prices by Rs 2 per litre each despite crude oil prices edging up. It must also be mentioned that IOCL was not compensated by the centre for the Rs 1,017 crore loss it incurred on holding domestic cooking gas prices by the government. Thus, it is also carrying Rs 4,796 crore of uncompensated cost from FY23.
IOCL mentioned it earned USD 12.05 on turning every barrel of crude oil into fuel in 2023-24, down from USD 19.52 a barrel gross refining margin in the previous fiscal.
