Indian Oil's Q2 profit nearly triples on LPG compensation

Bharat Petroleum

Today 11:23

Oct 30 (Reuters) - Indian Oil Corporation IOC.NS reported a nearly threefold jump in second-quarter profit on Friday, helped by government compensation for domestic LPG losses despite higher crude prices.

Here are details from India's largest refiner's earnings report:
The state-run company's standalone net profit rose to 216.30 billion rupees ($2.28 billion) in the quarter ended September 30, from 76.10 billion rupees a year earlier
Revenue from operations rose about 30% to 2.63 trillion rupees, helped by 72.43 billion rupees received from the federal government as compensation for under-recoveries incurred on domestic LPG sales during April-September
Under-recoveries are losses incurred by state-run fuel retailers on subsidized LPG sales, which the government reimburses periodically through compensation payments
Benchmark Brent crude LCOc1 prices were nearly 40% higher on average during the quarter than a year ago, due to the prolonged Iran war and continued geopolitical tensions stemming from the Russia-Ukraine war
The sharp rise in oil prices hurt fuel retailers, as the cost of supplying petrol and diesel outpaced realizations from pump sales
Indian Oil's total expenses rose 23% to 2.39 trillion rupees, largely due to higher crude procurement costs, with raw material expenses increasing about 35%
The company also flagged that a potential fall in global crude prices could hit its profitability in the upcoming quarters due to inventory losses


($1 = 95.0250 Indian rupees)

 (Reporting by Anuran Sadhu in Bengaluru; Editing by Jochelle Mendonca)
 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))