Covid-19 crisis: Unlock 1.0 to revive fuel sales soon, says Indian Oil

Fuel sales had dropped in April after Prime Minister Narendra Modi announced a nationwide lockdown to control the spread of Covid-19 infection

Weeks after the coronavirus lockdown led to fuel sales nosediving to record lows, Indian Oil Corp (IOC), the nation's largest oil firm, sees demand returning with the resumption of economic activities.

The company said though it is on track to spend the approved capital expenditure for 2020-21, it has "critically examined all capex proposals for rationalisation of cost and time frame." "The company is also conscious of the costs and has also undertaken rationalisation measures in this direction," it said without giving details.

Fuel sales had dropped in April after Prime Minister Narendra Modi announced a nationwide lockdown to control the spread of Covid-19 infections. The lockdown shut factories and offices, took most vehicles off roads, stopped train movement and suspended air travel.

"The demand for the petroleum products dropped by 46 per cent in April 2020. The sales of petrol, diesel and jet fuel (ATF) in April 2020 were down by 61 per cent, 56.7 per cent and 91.5 per cent respectively as compared to April 2019," it said in a regulatory filing on impact of Covid-19.

Due to certain relaxations by the Centre and some state governments starting last month, sales for the products improved in May as compared to April 2020. "However, the sale for these three products was still lower by 38.9 per cent as compared to May 2019." India will see more opening up from June 8 with malls and markets resuming operations.

Retail, telecom help RIL beat Indian Oil to be number one player by revenue

Fortune India list shows RIL as India's top firm in FY19.

Reliance Industries (RIL) has emerged as the number one company in terms of revenue in the Fortune India 500 list for 2019, pipping Indian Oil Corporation (IOC). RIL revenues crossed Rs 5.81 trillion in FY19 against IOC’s Rs 5.36 trillion.

Since it was first published in 2010, IOC has been topping the list.

RIL’s race to the top was powered by consumer-facing businesses like organised retail and telecom.

In terms of profits too, Mukesh Ambani-led RIL’s FY19 net profit was ahead at Rs 39,588 crore against IOC’s Rs 17,377 crore.

Over the past 10 years, RIL’s profit has been an average 3.01 times higher than that of IOC. The highest this went was up to 4.8 times in FY15.

Another interesting aspect of the 2019 list is the divergence in the fortunes of the public and private sector banks as 14 of the 22 public sector banks reported cumulative losses of Rs 74,253 crore, while the cumulative profit of 24 of the total private sector banks (including foreign banks and cooperative banks) touched Rs 60,747 crore — 6.16 per cent higher than FY18.

Just two private sector banks posted losses with IDFC First Bank reporting a loss of Rs 1,908 crore and Lakshmi Vilas Bank at Rs 894 crore.

The public sector banks made huge losses after several companies in the roads, power and steel sector failed to repay their loans. Many of these companies are now facing bankruptcy proceedings in courts across the country.

The top 500 list also showed that the combined revenue and profit of the companies in 2019 grew by 9.53 per cent and 11.8 per cent, respectively, even as 57 companies dropped off for reasons, including consolidation within the public sector banks and public sector undertakings space. The top 500 companies reported profit of Rs 4.55 trillion and revenues of Rs 91.7 trillion in the FY19 (see chart).

A total of 65 companies posted a cumulative loss of Rs 1.67 trillion, as compared to last year’s Rs 2 trillion racked up by 79 firms.

The list does not take into account subsidiaries of companies, hence many of the takeovers resulted in the acquired companies being excluded such as Hindustan Petroleum Corporation, which was acquired by Oil and Natural Gas Corporation, Rural Electrification Corporation acquired by Power Finance Corporation, Vijaya Bank and Dena Bank (merged into Bank of Baroda).Keep Reading : Stock Market News