State-owned Indian Oil Corporation Ltd (IOC) on Monday reported a sharp 98.6 percent drop in its September quarter profit, as refining margins fell and marketing constraints eased.
The company posted a standalone profit of Rs 180.01 crore in the July-September period — the second quarter of the current financial year 2024-25 — compared with a profit of Rs 12,967.32 crore a year ago, according to a stock exchange filing. for the company.
Profit also fell sequentially, compared to earnings of Rs 2,643.18 crore in the April-June period.
While refining margins declined, the company also booked net income from sales of LPG domestic cooking gas at government-regulated costs, which were lower than cost.
In the six months ended September 30, IOC had a shortfall in LPG receipts of Rs 8,870.11 crore, the filing showed.
It earned USD 4.08 from converting crude oil into fuels such as gasoline and diesel compared to a gross refining margin of USD 13.12 per barrel last year.
Pre-tax profits from downstream fuel businesses fell to Rs 10.03 crore from Rs 17,7555.95 crore in July-September 2023.
Income from operations fell to Rs 1.95 lakh crore in July-September from Rs 2.02 lakh crore a year ago as global oil prices fell.
Later in a statement, the IOC said it sold 21.931 million tons of petroleum products in the second quarter compared to 21.941 million tons last year and 24.063 million tons in the April-June period.
Its industry processed 16.738 million tonnes of crude oil, down from 17.772 million tonnes in July-September 2023 and 18.168 million tonnes in April-June 2024, it said.
The company and other state-owned petroleum companies — Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) — last year made impressive gains by holding down the price of petrol and diesel despite falling costs.
The price freeze was allowed in the name of recouping the losses of HPCL and two other outlets that had suffered in the previous year when they did not increase prices despite rising costs.
The profit generated due to the price freeze has decreased as the price of petrol and diesel was reduced by Rs 2 per liter just before the announcement of general elections. This and the decline in product breakdowns or restrictions on stable crude oil prices led to a decline in profitability.
Spreads — the difference between crude oil supplies and the final product price — have narrowed from their 2022-23 peak.