Indian Oil Corp Ltd, the country's top refiner, on Wednesday reported its first quarterly loss in more than four years in the March quarter, after a surge in inventory losses following a sharp fall in crude oil prices.
Chairman Sanjiv Singh said the fall in global prices impacted the group's financial performance for the January-March quarter as the company holds about 45 days inventory.
Inventory losses are booked when oil prices fall by the time a company processes oil into fuel. Brent crude oil prices fell 65.6 percent during the March quarter.
Head of finance Sandeep Kumar Gupta said in January-March, Indian Oil registered inventory losses of 146.92 billion rupees, against a gain of 26.55 billion rupees a year earlier.
The state-owned company reported a fourth-quarter net loss of 51.85 billion rupees, compared with a profit of 60.99 billion rupees a year ago.
IOC's March quarter gross refining margin - the difference between the cost of crude oil processed and the selling price of refined products - was minus $9.64 a barrel against $4.09 per barrel, a year ago.
India's fuel demand declined sharply towards the end of March as the government imposed coronavirus lockdowns.
Sales have picked up and crude processing has recovered, but analysts expect a full-scale recovery to pre-Covid-19 consumption levels in India to be months away.
Chairman Singh said India's fuel demand was recovering faster than expected and was expected to recover close to pre-Covid 19 levels by the end of 2020.
The company is currently operating its refineries at about 90 percent capacity and hopes to scale up operations to 100 percent by end-July, head of refineries Shrikant Vaidya said.
IOC, along with its Chennai Petroleum subsidiary, controls about a third of India's five million-barrels-per-day refining capacity.