OMCs clock record Rs 81k-cr profit in FY24
The retailers resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile
image for illustrative purpose
FinMin announced Rs30,000cr for IOC, BPCL and HPCL to support their energy transition plans in 2023-24 budget. However, that support was halved to Rs15,000 cr. The support by way of equity infusion via a rights issue, hasn’t been given yet
New Delhi: State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) reported bumper profits totaling about Rs81,000 crore in FY24, which far exceeded their annual earning in pre-oil crisis years.The combined standalone net profit of IOC, BPCL and HPCL in April 2023 to March 2024 (FY24) was better than their annual earning of Rs39,356 crore in pre-oil crisis years, regulatory filings by them showed. All the three companies posted the highest ever standalone as well as consolidated net profit in FY24.
The retailers have resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that they needed to recoup losses incurred in the year when they kept rates lower than cost. IOC in 2023-24 posted a standalone net profit of Rs39,618.84 crore, according to the company’s regulatory filing. This is compared with Rs8,241.82 crore annual net profit in 2022-23. While the company could argue that FY23 was impacted by the oil crisis, the FY24 earnings are higher than even the pre-crisis years - Rs24,184 crore net profit in 2021-22 and Rs21,836 crore in 2020-21. BPCL posted a net profit of Rs26,673.50 crore in FY24, higher than Rs1,870.10 crore earning in 2022-23 and Rs8,788.73 crore in FY22.
HPCL’s 2023-24 profit of Rs14,693.83 crore is compared with a Rs8,974.03 crore loss in FY23 and a profit of Rs6,382.63 crore in 2021-22, according to the filings. The losses in FY23 led to Finance Minister NirmalaSitharaman announcing Rs30,000 crore for IOC, BPCL and HPCL to support their energy transition plans in her budget for 2023-24.
Mid-way through the year, that support was halved to Rs15,000 crore. The support which was to happen by way of equity infusion via a rights issue, hasn’t been given yet. The three companies, which control roughly 90 per cent of India’s fuel market, ‘voluntarily’ have not changed petrol, diesel and cooking gas (LPG) prices for the past two years, resulting in losses when input cost was higher and profits when raw material prices were lower. They posted a combined net loss of Rs21,201.18 crore during April-September 2022 despite accounting for Rs22,000 crore announced but not paid LPG subsidy for the previous two years. Subsequent softening of international prices and government giving out LPG subsidy helped IOC and BPCL post annualised profit for 2022-23 (April 2022 to March 2023), but HPCL was in the red.
In FY24, things have changed dramatically. The three firms posted record earnings in the first two quarters (April-June and July-September) when international oil prices - against which domestic rates are benchmarked - almost halved to $72 a barrel from a year ago. International prices rose again in the subsequent quarter to $90, leading to moderation of their earnings.
