Indian Oil aims to improve refining margins this fiscal
Falling oil prices seems to have bottomed out, raising hopes of better margins for oil refiners in India. Crude oil prices jumped to an eight-month high of over $50 a barrel on June 9, indicating an easing in supply glut and bringing cheers to state oil refiner Indian Oil Corp. Ltd (IOCL), which hopes to improve its margins by avoiding inventory losses for the fiscal 2016-17. IOCL had reported inventory losses or fall in prices of crude oil below the price at which it was bought for the last two years—Rs.9,731 crore in 2015-16 and Rs.15,600 crore in 2014-15. IOCL’s inventory loss is higher compared to its counterparts such as Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPLC) as its refineries are located away from the coast. Inventory losses for BPCL in 2015-16 stood at around Rs.2,400 crore and HPCL at Rs.1,800 crore. “We wish there would not be any inventory loss during the current financial year. Crude oil prices have bottomed out and we don’t see a steep fall in oil prices which would impact our inventories significantly,” B. Ashok, chairman, IOCL, said.