New Delhi, Oct 28 (PTI) State-owned Indian Oil Corporation Ltd (IOC) on Monday reported a massive 98.6 per cent drop in net profit in the September quarter as refinery margins fell and that marketing margins have decreased.

The company reported a standalone net profit of Rs 180.01 crore in the July-September period – the second quarter of the current financial year 2024-25 – compared to a profit of Rs 12,967.32 crore a year ago. year, according to a stock filing filed by the company.

As refinery margins fell, the company also recorded under-recoveries on the sale of LPG, domestic cooking gas, at a government-controlled cost that was below cost.

For the six months ended September 30, IOC recorded an under-recovery on LPG of Rs 8,870.11 crore, according to the filing.

Processing crude oil into fuels like gasoline and diesel earned it $4.08, compared with a gross refining margin of $13.12 per barrel last year.

Pre-tax profits of downstream fuel retail companies fell to just Rs 10.03 crore from Rs 17,755.95 crore in July-September 2023.

Revenue from operations fell to Rs 1.95 lakh crore in July-September from Rs 2.02 lakh crore a year ago as international oil prices declined.

The company and other state-owned fuel retailers – Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) – had made extraordinary gains last year by maintaining prices of petrol and diesel despite a drop in costs.

The price freeze was justified in the name of recouping losses that HPCL and the two other retailers had suffered the previous year when they did not increase their retail prices despite rising costs.

The gains from the price freeze were eroded, with petrol and diesel prices reduced by Rs 2 per liter each just before the general elections were announced. This, combined with lower product cracks or margins on relatively stable crude oil prices, led to lower profits.

Cracks – the difference between crude oil as a feedstock and the price of the final product – have declined from 2022-2023 highs. PTI ANZ TRB

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