According to the oil and gas company, the rise in profit was mainly due to inventory gain, despite a decline in sales and weak refining margin. The state-run oil marketing company posted consolidated net profit at Rs 2,187.74 crore, up 21.6 per cent YoY.
Global crude oil prices have rebounded after a historic price crash in April. As market price of crude oil rises, refiners like BPCL
that bought existing stock at a cheaper rate ended up selling it higher, resulting in inventory gains.
However, the company’s revenue from operations saw a drop of 41 per cent for the quarter under review to Rs50,909.2 crore, compared to Rs86,412.9 crore in Q1 of the previous financial year. The average gross refining margin during the quarter ended June 30 was $0.39 per barrel, against $2.81 per barrel during the April-June quarter of 2019.
The company said the outbreak of Covid-19 globally and the resultant lockdown in many countries, including India from March 25, had an impact on its business. “Consequently lower demand for crude oil and petroleum products has impacted prices and therefore, refining margins globally. Since petroleum products are covered under essential services, the refining and marketing operations of BPCL
were continued during the lockdown period,” the company said.
Fuel sales in the quarter that saw economic activity coming to a halt due to nationwide Covid-19 lockdown slipped to 7.53 million tonnes when compared to 11.11 million tonnes sales last year.
"Decrease (in sales) is mainly in retail petrol (38.77 per cent), retail diesel (34.62 per cent,) ATF (82.92 per cent) and partly offsetby an increase in LPG (10.83 per cent)," it said.
It's operating profit stood at Rs 3,916 crore compared with an operational loss of Rs 619 crore, while EBITDA margin stood at 10.1 per cent during the quarter under review.
The stock, however, rose 1 per cent higher to Rs 427 in the intra-day trade before paring gains to trade 0.1 per cent higher at Rs 422 per share on the BSE. In comparison, the S&P BSE Sensex was ruling 0.50 per cent higher at 38,502 level at 10:00 am.