Indian Oil Corporation (IOC), India's largest oil refining and marketing company, reported a steep 98.6% drop in net profit for the se...
Indian Oil Corporation (IOC), India's largest oil refining and marketing company, reported a steep 98.6% drop in net profit for the second quarter of the 2024-25 fiscal year, mainly attributed to significant inventory losses amidst otherwise strong operational performance. Net profit plummeted to Rs 180.01 crore from Rs 12,967.32 crore in the same quarter the previous year, with a notable decrease from Rs 2,643.18 crore recorded in the first quarter of this fiscal year.
According to Anuj Jain, Director (Finance) at IOC, the company recorded a substantial inventory loss of over Rs 4,200 crore between July and September. This figure contrasts sharply with the Rs 8,300 crore inventory gain experienced in the corresponding period of 2023, indicating the impact of global oil price fluctuations on IOC’s earnings.
A key factor influencing IOC’s Q2 financial performance was its reduced gross refining margin. The corporation earned just USD 1.59 per barrel of crude oil refined into fuel, a stark drop from USD 18.11 per barrel earned in the previous year. This decline in refining margin, combined with inventory losses, largely explains the sharp fall in earnings.
IOC’s operational performance, however, remained solid, demonstrating resilience amid challenging financial conditions. The company’s refineries processed 16.738 million tonnes of crude oil in the second quarter, down from 17.772 million tonnes in the same period last year. Additionally, IOC reported selling 21.931 million tonnes of petroleum products, almost matching the 21.941 million tonnes sold in Q2 of 2023.
The company also reported an under-recovery of Rs 8,870.11 crore on its LPG sales as of September 30, reflecting the government’s price regulations to keep LPG affordable for consumers. Despite these financial setbacks, IOC continues to dominate the Indian oil sector, managing nearly half of the country’s refining and marketing capacity and playing a critical role in stabilizing domestic fuel supplies.
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