India's Reliance Industries profit surges, powered by oil business

Robust refining margins due to intake of cheaper Russian crude and fuel exports buoyed its dominant oil-to-chemicals business

Reuters
Published : 23 July 2022, 09:36 AM
Updated : 23 July 2022, 09:36 AM

India's Reliance Industries Ltd on Friday reported a 46.3% jump in June-quarter profit, as robust refining margins due to intake of cheaper Russian crude and fuel exports buoyed its dominant oil-to-chemicals business.

The Mukesh Ambani-led conglomerate said consolidated profit rose to 179.55 billion rupees ($2.25 billion) in the three months ended June 30 compared with 122.73 billion rupees a year earlier.

Reliance emerged as one of the key buyers of discounted Russian crude after some Western buyers shunned it following Moscow's invasion of Ukraine in late February.

The private refiner during the quarter also boosted fuel exports, especially to European countries grappling with shortages due to the sanctions on Russia.

"Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows. This along with resurgent demand has resulted in tighter fuel markets and improved product margins," said Mukesh Ambani, chairman and managing director of Reliance Industries.

Reliance's June qtr profit soars on robust refining margins and fuel cracks

Reliance's June qtr profit soars on robust refining margins and fuel cracks

Refining margins for diesel, gasoline and jet fuel in Asia hit a record high in June.

Consolidated revenue from the oil-to-chemicals business – comprising the world's biggest refining complex at Jamnagar and petrochemicals plants - jumped 56.7% to 1.62 trillion rupees, its best ever quarterly performance, the company said.

Reliance, which produces gas from an ultra deep water block in the country's east coast, said it also benefited from a revision in local gas prices and expects higher local prices from October.

India pegs its domestically produced gas to global benchmarks.

V Srikanth, joint chief financial officer of Reliance, said export taxes will restrict India's overseas fuel sales and diminish realisation.

On Jul 1, India imposed the windfall tax on exports of gasoline, diesel and aviation fuel after private refiners turned to overseas sales to gain from robust refining margins instead of selling at lower-than-market rates in the country.

The government however later withdrew export tax on gasoline and cut duties on other refined fuels as cracks eased.

The company's telecom unit, Jio, reported a near 24% surge in net profit, while gross revenue at its retail unit, the country's biggest, soared 52%.

Reliance said average revenue per user (ARPU), a key performance metric, for Jio during the quarter was at 175.7 rupees per subscriber per month, an increase of 27% from a year ago.

Mukesh Ambani last month stepped down from the telecoms arm and handed the reins to his son Akash, setting the stage for a leadership transition at his business empire.

Toufique Imrose Khalidi
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