Reliance Industries Ltd on Friday reported a 46.3 per cent jump in June-quarter profits as strong refining margins on account of consumption of cheaper Russian crude oil and fuel exports hit its core oil-to-chemicals business.
The Mukesh Ambani-led conglomerate said consolidated profit rose to Rs 17,955 crore ($ 2.25 billion) in the three months ended June 30, compared to Rs 12,273 crore a year ago.
Reliance emerged as one of the major buyers of discounted Russian crude after some Western buyers abandoned it following Moscow’s invasion of Ukraine in late February.
Private refiners also boosted fuel exports during the quarter, especially to European countries suffering shortages due to sanctions on Russia.
Mukesh Ambani, Chairman and Managing Director, Reliance Industries said, “Geopolitical conflict has created significant dislocation in energy markets and disrupted traditional trade flows. Along with this, resurgent demand has led to fuel markets and better product margins. has improved.”
Refining margins for diesel, gasoline and jet fuel in Asia hit a record high in June.
Graphic: Reliance’s June quarter profit rises on strong refining margins and fuel crackdown – https://graphics.reuters.com/INDIA-RELIANCE/akpezwyayvr/Pasted%20image%201658474418224.png
The company said consolidated revenue from the oil-to-chemicals business – which includes the world’s largest refining complex at Jamnagar and petrochemicals plants – rose 56.7 per cent to Rs 1.62 trillion, its best quarterly performance ever.
Reliance, which produces gas from an ultra deep water block in the country’s east coast, said it has also benefited from the revision in local gas prices and expects higher local prices from October.
India produces domestically produced gas at global standards.
Reliance’s joint chief financial officer V. Srikkanth said the export tax would restrict India’s overseas fuel sales and reduce realization.
On July 1, India imposed unexpected taxes on exports of petrol, diesel and aviation fuel, as private refiners turned to overseas sales to profit from strong refining margins, instead of selling at lower rates than the market in the country.
The government, however, later withdrew export tax on gasoline and cut duty on other refined fuels as the cracks narrowed.
The company’s telecom arm, Jio, reported a nearly 24 per cent rise in net profit, while the country’s largest retail unit, gross revenue grew 52 per cent.
Reliance said a key performance metric for Jio during the quarter was the average revenue per user (ARPU) at Rs 175.7 per subscriber per month, up 27 per cent from a year ago.
Mukesh Ambani resigned from the telecom arm last month and handed over the reins to his son Akash, setting the stage for a leadership change in his business empire.