InvestorQ : Why did the profits of BPCL fall so sharply in the March 2022 quarter?
Katherine Gonsalves made post

Why did the profits of BPCL fall so sharply in the March 2022 quarter?

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rhea Babu answered.
2 months ago
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We have already seen this trend in the case of IOCL and HPCL and that trend has now repeated in the case of BPCL also. The trend of downstream oil companies reporting higher sales and lower profits was true for BPCL also. For instance, for the March 2022 quarter, BPCL reported -82% fall in net profit at Rs2,131 crore. However, for the fourth quarter Q4FY22, the sales revenues were up 25% yoy at Rs1.23 trillion.

On the one hand, BPCL did gain from higher gross refining margins (GRM) and better inventory translation gains. However, that was largely offset by the losses due to static prices of petrol and diesel between November and March. BPCL was paying higher for importing crude but was selling oil at sub-cost rates. That entire shortfall was funded by the OMCs like BPCL, IOCL and HPCL. That applied brakes on profit growth in the quarter. That is despite the fact that in Q4FY22 ,the gross refining margins (GRMs) surged from $4.06 to $9.09 per barrel.

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