A man paints the logo of oil refiner Bharat Petroleum Corp (BPCL) on a wall on the outskirts of Kochi, India
Higher costs weighed on state-run Oil India which posted a smaller-than-expected quarterly profit on Thursday.
In the three months ending June 30, its earnings dropped 9% year-on-year to 14.67 billion rupees (about $175 million), which was lower than the 16.87 billion rupees profit projected by analysts, according to LSEG statistics.
Oil India, whose exploration and production assets are primarily located in the country’s northeast, reported a 26% increase in quarterly revenue to 58.40 billion rupees, but a nearly 40% increase in total expenses to 40.26 billion rupees was more than offset by a fourfold spike in excise duty costs.
The windfall tax, which is a levy that certain sectors face when they see an unexpected increase in earnings, was increased three times in the quarter on petroleum crude in India.
The government of India instituted the tax in July 2022 with the goals of increasing domestic fuel production to keep up with surging demand and discouraging refiners from increasing product exports for the purpose of reaping larger profits in foreign markets.
According to statistics from the oil ministry, fuel demand in India, the world’s third-largest consumer and importer of oil, was high from April to June.
Opening a new tab, Peer Oil and Natural gas announced earlier this week that their first-quarter profits were higher than expected.
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