Indian Oil Corporation (IOC) on Tuesday reported a 52 percent decline in fourth quarter profit as the company sold fuel below market prices due to inventory losses. While India is the world’s third-largest oil importer and consumer, Indian Oil controls about a third of India’s five million barrel-per-day refining capacity with its unit Chennai Petroleum.
However, India has been buying increasingly cheaper Russian oil as discounts have fallen from $30 a barrel in 2022 to less than $10 this year, while refiners also cut fuel prices at the pumps ahead of this year’s general elections.
IOC reported a 52% decline in profit to 48.38 billion rupees ($579.77 million) in the quarter ended March 31.
Refiners purchase crude oil and practice it after a gap of 45 to 60 days. Inventory gains are booked when oil prices rise by the time the company refines the crude and sells the fuel.
So far this year, crude oil prices have increased by about 15 percent.
Indian fuel prices remained stable during fiscal year 2023-2024, even as the market price of refined products in Asia increased, leading to losses for local refiners.
IOC’s revenue from operations fell 2.7% to Rs 2.2 trillion.