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In May last year, Indian Oil was operating its plants at average 67 per cent
Indian Oil Corp has reduced crude processing to average at 84 per cent of overall capacity from 96 per cent in April as a devastating second wave of COVID-19 dented fuel demand, the chairman of the country’s biggest refiner said on Wednesday. Domestic sales of diesel and petrol by state refiners plunged by a fifth in the first half of May from a month earlier, preliminary data showed on Monday, as lockdowns to curb COVID-19 cases hit industrial activities and consumption.
“Demand destruction is there, which has also reflected in refinery runs… When it (fuel demand) will return to normalcy is a very difficult question to answer,” Chairman SM Vaidya said, pinning recovery hopes on the country’s vaccination drive against the pandemic.
The company, along with subsidiary Chennai Petroleum, controls about a third of India’s 5 million-barrels-per-day (bpd) refining capacity. In May last year, the state-owned refiner was operating its plants at an average 67 per cent, Vaidya said.
Still, a surge in crude prices boosted inventory gains and gross refined margins (GRMs) at IOC, helping it report a net profit of Rs 87,81 crore for the quarter ended March 31, against a loss of Rs 5,185 crore a year ago. Analysts were expecting a profit of Rs 5,506 crore, according to Refinitiv IBES data.
IOC’s GRM – the difference between the cost of crude oil processed and the selling price of refined products – was $10.60 per barrel against minus $9.64 a year ago.
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