India’s Reliance Industries Ltd on Friday reported a 46.3% jump in its June-quarter profit as strong refining margins hit by consumption of cheaper Russian crude and fuel exports hit its core oil-to-chemicals business.
The Mukesh Ambani-led conglomerate said consolidated profit rose to Rs 179.55 billion ($2.25 billion) in the three months ended June 30, from Rs 122.73 billion 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.
During the quarter, private refiners boosted fuel exports to European countries, particularly those facing 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
Consolidated revenue from the oil-to-chemical business – which includes the world’s largest refining complex at Jamnagar and petrochemicals plants – jumped 56.7% to Rs 1.62 trillion, its best quarterly performance ever, the company said.
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 after 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% increase in net profit, while the country’s largest retail unit, gross revenue grew 52%.
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% 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.