State-owned Indian Oil Corporation (IOC) on Monday reported a sharp 98.6% decline in net profit for the September quarter due to lower refinery margins and narrower marketing margins.
According to stock exchange filings, the company had a standalone net profit of Rs 180.01 crore in the July-September period, the second quarter of the fiscal year 2024-25, compared to Rs 12,967.32 crore in the same period last year. It was 10,000 rupees. By company.
Profit also declined quarter-on-quarter as compared to profit of Rs 2,643.18 crore in the April-June period.
While refinery margins declined, the company also recorded unrecovered amounts from selling domestic edible gas LPG at government-controlled costs, which are lower than cost.
According to the filing, for the six months ended September 30, IOC had an LPG recovery shortfall of Rs 8,870.11 crore.
The crude refining margin was $13.12 per barrel last year, while the profit from converting crude oil into fuels such as gasoline and diesel was $4.08.
The pre-tax profit of the downstream fuel retail business fell to just Rs 10.03 billion from Rs 17,755.59 billion in July-September 2023.
Operating revenue for the July-September period fell to 1.95 billion rupees from 2.02 billion rupees in the same period last year due to softening international crude oil prices.
In a later statement, IOC said it sold 21.931 million tonnes of petroleum products in the second quarter, compared with 21.941 million tonnes in the same period last year and 24.063 million tonnes in the April-June period.
The company announced that its refineries processed 16.738 million tons of crude oil, down from 17.772 million tons in July-September 2023 and 18.168 million tons in April-June 2024.
The company and other state-run fuel retailers, Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL), made extraordinary profits last year by maintaining petrol and diesel prices despite falling costs.
The price freeze was justified in the name of recovering losses suffered by HPCL and two other retailers last year by not increasing retail prices despite soaring costs.
Petrol and diesel prices were cut by 2 rupees per liter each just before the general election was announced, hurting profits from the price freeze. In addition to this, relatively stable crude oil prices caused product cracks and lower margins, leading to a decline in profits.
Crack (the difference between raw material crude oil prices and final product prices) has narrowed from the highs of 2022-23.
