(Reuters) -Indian Oil Corp, the country’s top refiner, reported a 50% jump in fourth-quarter profit on Wednesday, mostly helped by inventory gains, with the company looking to tap spot markets for more crude purchases.
Standalone net profit surged to 72.65 billion Indian rupees ($858.57 million), compared with a profit of 48.38 billion rupees a year earlier.
The company recorded an inventory gain in the fourth quarter that helped in increased profits, compared with an inventory loss a year earlier, Director Finance Anuj Jain said at a press conference, without elaborating.
An inventory gain is booked when oil prices rise when the company is refining and shipping petroleum products. Brent crude prices jumped about 17% from a multi-year low in September during the January-March quarter.
IOC’s average gross refining margin, the profit from making refined products from one barrel of oil, was $7.85 per barrel for the quarter ended March 31, compared with $8.39 per barrel a year earlier.
The company is looking to tap spot markets for more crude oil, targeting a term-to-spot ratio of 55:45 compared with 60:40 last year, Jain said.
“We are looking to buy more oil from spot markets as there is abundant supply and more spot volumes will give me flexibility to test new grades.”
Meanwhile, IOC is looking to invest up to one trillion rupees to expand the company’s petrochemical capacity, Chairman A. S. Sahney said.
Indian Oil, along with its unit Chennai Petroleum, controls about a third of India’s refining capacity.
(Reporting by Sethuraman NR in Bengaluru and Nidhi Verma in New Delhi; Editing by Shounak Dasgupta)
