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Indian Oil's quarterly profit jumps as refining margin doubles

New Delhi

STATE-OWNED Indian Oil Corp posted a 50 per cent jump in quarterly profit as the margin for converting crude into fuels more than doubled.

Net income climbed to 68.3 billion rupees (S$1.36 billion) in the quarter ended June 30, from 45.5 billion rupees a year earlier, the company said in a stock exchange filing on Saturday. That compares with the 53.3 billion rupee average of 20 estimates compiled by Bloomberg. Sales rose 16 per cent to 1.5 trillion rupees.

India's largest refiner has taken advantage of rising domestic oil consumption, which expanded for a 10th straight month in June, as vehicle sales surged and economic activity picked up. The Mumbai-based company is locking in future supplies and said this month it signed a term tender to purchase American oil for delivery every month between November and January as US President Donald Trump seeks to squeeze Iran exports.

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Indian Oil earned US$10.21 for every barrel of crude it turned into fuel in the quarter compared with US$4.32 a year earlier. A weaker rupee also helped since the refiner's products are priced mostly in dollars but it reports earnings in rupees. The rupee averaged about 67.06 for a dollar in the quarter ended June, 4 per cent lower than a year ago.

Brent crude, the global benchmark, averaged about US$75 a barrel in the quarter ended June, up from about US$51 a barrel a year earlier. BLOOMBERG