Indian Oil Corporation (IOCL) registered a loss in the first quarter of the current fiscal despite a substantial rise in revenue as marketing margins took a hit due to skyrocketing crude oil prices during the period. The state-run refiner posted a standalone loss of ₹1,992.53 crore in the quarter ended June 2022, compared with a profit of ₹5,941.37 crore in the year-ago period.

The company slid into loss even as revenue from operations jumped 63% to ₹251,932.89 crore during the quarter under review, from ₹155,056.27 crore in the corresponding quarter last fiscal. Total income for Q1 FY23 stood at ₹252,616.54 crore, as opposed to ₹155,619.83 crore.

However, Indian Oil Corporation (IOCL) saw the cost of materials double to ₹1,21,373.07 crore during the three months ended June 2022, compared with ₹62,360.25 crore in the same period last fiscal. The rise in material costs came on the back of elevated crude oil prices, which have been hovering around $100 per barrel since February after Russia's military invasion of Ukraine, and subsequent sanctions on Russian crude by the U.S. and its European allies. Material costs had increased sequentially in the March quarter to ₹90,401.52 crore with the rising crude oil prices.

The steep rise in crude oil prices had taken a toll on the margins of Indian Oil, as seen in the numbers shared by the company. Average gross refining margin (GRM) for the April-June 2022 period is $31.81 per barrel, compared to $6.58 per barrel in April-June 2021 period .

The core GRM or the current price GRM for the period April-June 2022 after offsetting inventory loss/gain comes to $25.34 per barrel, IOCL states in a regulatory filing. However, the suppressed marketing margins of certain petroleum products have offset the benefit of increase in GRM, it further adds.

Segment results for the petroleum products slipped into a loss of ₹1,052.78 crore in the quarter under review, compared to a profit of 6,708.86 crore in Q1 FY22. Petrochemicals segment saw segment profit of ₹269.26 crore, a marked decline from ₹1,737.82 crore a year ago.

“Indian Oil sold 24.648 million tonnes of products, including exports, during the quarter of financial year 2022-23. Our refining throughput for Q1 2022-23 is 18.936 million tonnes and the throughput of the corporation’s countrywide pipelines network including gas pipelines 24.649 million tonnes during the same period,” says S.M. Vaidya, chairman, Indian Oil.

Pipeline throughput and refineries throughput in June quarter of FY22 was 20.491 million tonnes and 16.719 million tonnes, respectively.

Indian Oil sold 22.973 million tonnes of fuel domestically during the June quarter of 2022-23, up from 18.745 million tonnes in the corresponding quarter of last fiscal. Exports also grew to 1.675 million tonnes from 1.580 million tonnes.

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