OMCs' FY24 combined profit rises over 25-fold to Rs86,000 cr

India’s state-owned oil marketing companies (OMCs) have reported a 25-fold increase in their combined profit, at Rs86,000 crore, for the financial year 2023-24 as they gained from fluctuations in the prices of crude oil in the wake of geo-political developments.

In fact, oil refining and marketing companies in India have been buying crude oil from Russia at discounted rates amidst the economic sanctions imposed on that country by the US and its allies in the west.

The purchase of crude from Russia at discounted prices not only helped ensure domestic availability with relatively moderate increase in prices, but also accounted for a big rise in fuel exports from the country.

OMCs also excelled in throughputs, capex utilisation, and project completion.

For the 2023-24 fiscal, top oil PSU Indian Oil Corporation Ltd (IOCL) recorded a net profit of Rs39,619 crore, the highest ever in the company's history. IOCL had reported a net profit of Rs8,242 crore in the previous year. The company also proposed a final dividend of Rs7 per equity share of Rs10 face value the 2023-24 fiscal. 

Similarly, HPCL reported a record net profit of Rs16,014 crore against a net loss of Rs6,980 crore in the previous financial year. 

For BPCL net profit for the 2023-24 fiscal rose nearly 13 times compared to the previous fiscal to Rs26.673 crore. The company also announced planned capital outlay of Rs1.7 lakh crore under `Project Aspire’ over the next five years.

The spike in profitability of state-owned OMCs may be attributed to the marketing freedom allowed under the new dispensation.