InvestorQ : Why did BPCL report such a huge loss in the Marr-20 quarter?
Aditi Sharma made post

Why did BPCL report such a huge loss in the Marr-20 quarter?

Answer
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Aashna Tripathi answered.
3 months ago


BPCL reported pre-tax loss of Rs.2959 crore for the Mar-20 quarter. The sharp dip into losses was largely driven by weak demand as well as large inventory losses on account of valuing finished goods inventory and inputs at market value. The sharp fall in crude to around the $30/bbl levels by end of March had a negative impact on BPCL. As a result, BPCL had to take an exceptional loss of Rs.1310 crore in the Mar-20 quarter. The normal practice is to mark the inventory value to realizable value. For the full year FY20, the gross refining margins (GRMs) fell from $4.58 last year to just about $2.50 this year on a per barrel basis. Overall sales in May 2020 were 30% lower than in May 2019.