Profits for refining and trading activity at Irish National Petroleum Corporation (INPC) were up 4 per cent from £263,000 to £274,000 for 1996.
However, this year 60 per cent of INPC products will be sold commercially, as the "mandatory regime" is reduced.
The mandatory regime obliges oil importers in the Republic to take some of their oil supplies from INPC at prices which enable the company to recover its costs.
According to INPC chairman, Mr Ed O'Connell, the bulk of the 60 per cent has already been sold to Irish dealers on term contracts.
The cost at the pump of the mandatory regime is now below one-fifth of one penny per litre. INPC say it aims to eliminate the cost completely over the next few years.
The Minister for Public Enterprise, Mrs O'Rourke, will have to make a decision at the end of this year on whether to reduce the mandatory regime even further.
The company says a fall in crude oil prices should have produced good refining margins in 1997 but due to the extremely mild winter, margins were down in the first quarter. However, they have recovered over the second and third quarters.
