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Sliding crude puts squeeze on OIL, BPCL, but OVL bucks trend

Declining global oil prices may have brought relief to consumers and another round of cut in motor fuel prices is expected but the slide is putting a squeeze on the bottomline of domestic oil producers and refiners in the second quarter.

Oil India Ltd saw its net profit slide 33% in the September quarter due to declining realization on each barrel, which was amplified by a drop in output.

Net profit dropped to Rs 608.3 crore from Rs 903.7 crore in the previous corresponding period, the company said in a statement.

Gross realization on each barrel of oil dropped 6.5% to $101.3 in the quarter under review from $108.3 in the previous corresponding period. Net realization too slid to $45.3 per barrel as compared to $52.3. Crude production fell by over 4% to 0.88 million tonnes but gas output was 4.2% higher at 0.69 billion cubic metres.

The company gives discounts to state refiners to help bridge part of their losses on selling kitchen fuels at government-capped rates, which reduces its net realization.

BPCL Refiner Bharat Petroleum's net dropped 50% in the quarter under review as the company's refining margin dipped due to a nearly 30% drop in global oil prices.

Profit in the July-September period slid to Rs 464.2 crore from Rs 931.1 crore in the same period a year ago, the company said in a filing to bourses. The company's refining margin stood at $2.4, down from $4.4 per barrel in the same period last year.

The trend was bucked by ONGC Videsh Ltd, which reported a 9.6% increase in net profit in the first half of the fiscal on the back of higher oil and gas output. Net profit in the April-September period rose 9.7% to Rs 2,068 crore against Rs 1,886 crore in the same period a year ago, the company said in a statement. OVL is an unlisted firm and does not give quarterly earning numbers.

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