Indian Oil Corporation (IOC), the country’s largest oil refiner, reported a 64 per cent decline in its standalone net profit for the third quarter of 2024-25 because of significant inventory and foreign exchange losses, coupled with weaker refining margins.
Net profit stood at ₹2,873.53 crore for the October-December period down from ₹8,063.69 crore in the same quarter a year ago, the company disclosed in a stock exchange filing on Monday. Profit rebounded sharply from ₹189.01 crore in the July-September quarter.
The sharp year-on-year decline was attributed to a ₹7,800-crore inventory loss and ₹1,900-crore in forex losses, IOC director (finance) Anuj Jain said.
Inventory losses occur when crude oil purchased at higher prices is later processed and sold at lower prevailing prices, while forex losses stemmed from currency fluctuations.
Crack spreads — the difference between crude oil costs and product prices — also weakened significantly. Diesel cracks dropped to $10.8 per barrel from $19.18 per barrel a year ago, while petrol cracks fell to $3.63 per barrel from $7.04.
IOC’s gross refining margins (GRM) fell to $2.95 per barrel in the third quarter compared with $13.53 per barrel in the corresponding quarter a year ago,, reflecting the broader pressure on profitability.
Despite the profit drop, IOC achieved its highest-ever quarterly fuel sales at 26.13 million tonnes (mt), up 6.2 per cent year-on-year.
Petrochemical sales rose 7 per cent, and gas trading volumes surged 24 per cent during the period, according to IOC chairman A.S. Sahney.