Fuel price hike turns boon for oil companies

When most listed companies faltered in face of macroeconomic shocks, four state-run petroleum distribution companies saw higher profit growth in the first nine months of the current fiscal year, thanks to hikes in fuel prices.

The state-owned petroleum distribution companies are—Padma Oil, Meghna Petroleum, Jamuna Oil, and Eastern Lubricants.

As per its unaudited financial statements, Eastern Lubricants saw its net profit grew by 293 per cent year-on-year in the July-March period of the fiscal 2022-23, while profits of Jamuna Oil jumped by 100 per cent during the period.

Besides, the net profit of Padma Oil Company surged by 33 per cent year-on-year, while 30.43 per cent year-on-year profit jump was reported by Meghna Petroleum in the first three quarters of FY23.

Though an unprecedented fuel price hike hammered people’s lives enormously, it turned into a boon for the shareholders of these fuel and power sector companies.

When a company grows with a hefty profit surge, its investors or shareholders also benefit from that growth, according to market analysts.

The government in early August last year had hiked fuel prices, which was the second month of the current fiscal year 2022–23.

As per the new price tag, the selling price of both diesel and kerosene is Tk 109 per liter, while it is Tk 125 for petrol and Tk 130 for octane per liter at refueling stations.

Among the state-run petroleum distribution companies, Eastern Lubricants Blenders Limited registered a 293 per cent year-on-year jump in net profit in the July-March period of the fiscal 2022-23.

The company’s net profit rose to Tk 1.18 crore in the current fiscal’s July-March period from Tk 30 lakh in the same period last fiscal. The listed company’s earnings per share (EPS) jumped to Tk 9.89 for the July-March period of FY23 from Tk 2.55 for the same period of FY22.

The company’s earnings soared so far in the current fiscal due mainly to an increase in revenue over the previous year.

On the other hand, Padma Oil Company’s net profit surged by 33.33 per cent to Tk 220 crore in the July-March period of FY23 from Tk 165 crore in the same period last fiscal, as per its unaudited financial report.

The petroleum distributor’s earnings per share stood at Tk 6.55 for the third quarter (January-March) of the current fiscal, against Tk 5.17 for the same quarter last fiscal.

Its EPS was Tk 22.40 for the July-March of the fiscal 2022-23, which was Tk 16.84 for the same period of the fiscal 2021-22.

The company’s earnings increased due mainly to the surge in non-operating income and an increase in sales volume, the company said in its financial reports.

Meanwhile, Jamuna Oil Company reported Tk 230 crore in net profit in the first nine months of the fiscal 2022-23, which was Tk 115 crore in the corresponding period of the fiscal 2021-22.

Its EPS escalated to Tk 20.81 for the July-March of FY23 from Tk 10.45 for the same period last fiscal.

The company’s EPS was Tk 5.54 for the January-March quarter of the current fiscal, against Tk 2.02 for the same quarter last fiscal.

The state-owned company’s earnings got heavily inflated owing to an increase in other income, the company stated in its official financial disclosure.

Another listed state-owned fuel distributor – Meghna Petroleum – registered a 30.43 per cent year-on-year profit rise in the first nine months of the fiscal year 2022-23. The company’s net profit jumped to Tk 270 crore in the July-March period of FY23, from Tk 207 crore in the same period last fiscal year.

The company reported EPS of Tk 24.95 for the July-March of FY23 against Tk 19.11 for the same period last fiscal year.