New Delhi:

Indian Oil Corporation (IOC), the nation’s largest oil firm, on Tuesday reported a 81 per cent drop in June quarter net profit, as refinery and marketing margins fell and the firm booked under-recovery on the sale of domestic cooking gas LPG at government-controlled rates.

IOC reported standalone net profit of Rs 2,643.18 crore in the April-June period — the first quarter of the current 2024-25 fiscal year — compared to a profit of Rs 13,750.44 crore a year back, the company said in a stock exchange filing.

Net profit also declined sequentially, when compared to an earning of Rs 11,570.82 crore in the January-March quarter.

While the firm earned USD 6.39 on turning every barrel of crude oil into fuel in the quarter (USD 8.34 per barrel gross refining margin last year), its pre-tax earnings from downstream fuel retailing businesses slumped 77 per cent to Rs 4,299.96 crore.

The company and other state-owned fuel retailers — Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) — last year made extraordinary gains from holding petrol and diesel prices despite a drop in cost.

The price freeze was justified in the name of recovering losses the three retailers had suffered in the previous year when they did not raise retail prices despite a surge in cost.

The gains arising from the price freeze were eroded with petrol and diesel prices being cut by Rs 2 per litre each just before general elections were announced. This together with a drop in product cracks or margins on relatively stable crude oil prices led to fall in profits.

Prior to IOC, BPCL and HPCL too have reported a drop in their first quarter earnings.

Also, IOC had an un-compensated LPG subsidy of Rs 5,156.23 crore in the quarter, the filing showed.

As per an order of the oil ministry, when market determined price (MDP) of LPG cylinders is less than its effective cost to customer (ECC), the oil marketing companies (OMCs) have to retain the difference in a separate buffer account for future adjustment.

“However, as on June 30, 2024, the company had a cumulative net negative buffer of Rs 5,156.53 crore, as the retail selling price was less than MDP,” IOC said.

This is to be made good by the government by way of a subsidy.

Revenue from operations was almost flat at Rs 2.15 lakh crore.

IOC refineries turned 18.16 million tonnes of crude oil into fuel in the quarter as compared to 18.75 million tonnes in April-June 2023.

Fuel sales were up 3 per cent at 24.06 million tonnes (excluding exports).

IOC further said the board in a meeting on Tuesday accorded Stage-1 approval for construction of a greenfield terminal at Bihta, near Patna, in Bihar on Barauni-Kanpur product Pipeline (BKPL) and Patna-Motihari-Baitalpur Pipeline (PMBPL) at an estimated cost of Rs 1,698.67 crore.
 

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New Delhi:

A man was arrested by the Delhi Police within 48 hours of the Indian Oil Corporation reporting an incident of theft from the Delhi-Panipat section of its pipeline on October 4.

The oil and gas giant, in its complaint, said that it inspected its pipeline on September 29 and found oil was likely being stolen from a spot in Delhi’s Dwarka area.

The police, acting on their complaint, visited the area and found that the IOCL’s pipeline had been drilled and a plastic pipe was inserted into the line using the valve mechanism.

The police team excavated the area and found that a machine was installed by the accused to extract oil by drilling holes into the pipeline and using plastic pipes to connect to the main oil line.

The pipes were put about 40 meters from the IOCL pipeline through a tunnel suspected to have been dug by the accused. The pipes come overground on a plot owned by one 52-year-old Rakesh, alias Golu. The police have arrested him.

He is being interrogated about the accused involved in the theft and efforts are on to arrest the others involved.

A case has been filed under relevant sections of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, the Explosive Substance Act, the Indin Penal Code, and the Essential Commodities Act.

The police have recovered a 40 metres long pipe, a 62 metres long pipe, a pipe that is 35 metres long, a mini blower, a large blower, a spanner and wrenches, boxes of epoxy hardener, a hand-saw, a sealing gun, and a wooden ladder among other things from the site.