BENGALURU - Indian Oil Corp (IOC) said on Friday it was operating its refineries at 90% capacity as diesel sales were yet to reach pre-COVID-19 levels, but it expects to ramp up refining to full capacity within a quarter as demand picks up.
Indian state fuel retailers' gasoline sales exceeded pre-pandemic levels in the first fortnight of July, as motorists took back to the roads after states eased COVID-19-related lockdowns.
Even as a second wave of COVID-19 infections battered the country during April and May, this year's lockdown restrictions were not as severe as compared to last year, with most states allowing some vehicular movement.
Still, Indian refiners had reduced crude processing during the quarter and curtailed oil purchases amid higher fuel inventories.
Diesel sales are still at around 85%-90% of pre-COVID-19 levels and are expected recover by the festival of Diwali in November, Chairman S.M. Vaidya said in a press conference, adding that the refinery runs are also expected to be at 100% capacity by then.
Higher fuel prices also sapped consumption, with India's tax-heavy retail prices of gasoline and gasoil touching record highs due to a surge in global crude oil prices. International Brent prices jumped about 18% during the June quarter.
The state-owned company had reported a net profit of 59.41 billion rupees ($798.92 million) in the quarter ending June 30, compared with a profit of 19.11 billion rupees a year earlier, when lockdowns due to the COVID-19 pandemic hammered fuel demand and squeezed margins.
Revenue from operations soared 74.3% to 1.55 trillion rupees in the quarter.
Indian Oil also said it has extended its joint venture partnership with Malaysia's Petronas for the retail sale of diesel and gasoline, but it did not divulge more details.
IOC, along with its unit Chennai Petroleum, controls about a third of India's five million-barrels-per-day refining capacity.
($1 = 74.3625 Indian rupees)
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Amy Caren Daniel) ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters Messaging: firstname.lastname@example.org))