IOC Profit Tanks 64% Despite Record Fuel Sales: Inventory Losses Hit Q3

New Delhi, Jan 27 (PTI) Indian Oil Corporation (IOC), the nation's biggest oil firm, on Monday reported a 64 per cent drop in its December quarter net profit as inventory and foreign exchange losses eroded gains from record fuel sales.

Standalone net profit of Rs 2,873.53 crore in October-December 2024 - the third quarter of April 2024 to March 2025 fiscal year (FY25) - compared to Rs 8,063.69 crore earnings in the same period a year back, according to a stock exchange filing of the company.

Profit however surged quarter-on-quarter when compared to Rs 189.01 crore earnings in July-September 2024.

IOC Director (Finance) said the decline in profit was mainly because of inventory and foreign exchange losses and a fall in product cracks.

The company had a Rs 7,800 crore of inventory loss delta in the third quarter. Another Rs 1,900 crore was on account of forex losses.

Inventory loss is booked when a company buys oil at a particular price but by the time it is able to ship to India and process it, the prices would have fallen. And since the product prices are benchmarked to prevailing rates, inventory loss is accounted for. Inventory gains happen if the reverse happens.

Also, cracks - the difference between the cost of raw material (crude oil) and finished product price - dropped. For diesel it came down from USD 19.18 per barrel in October-December 2023 to USD 10.8 and that for petrol from USD 7.04 a barrel to USD 3.63 per barrel in October-December 2024, he said.

The firm also saw its refining margins fall in Q3. It earned USD 2.95 on turning every barrel of crude oil as against a gross refining margin of USD 13.53 per barrel in Q3 of the previous fiscal.

IOC chairman A S Sahney said the company posted its highest ever quarterly sale of 26.134 million tonnes, up 6.2 per cent over last year, as the company refocussed on its core competence of fuel sales.

Petrochemical volumes also rose 7 per cent while its gas trading volumes jumped 24 per cent in the quarter.

He said the company also gained market share - from 46.4 per cent in PSU sale in Q2 (July-September) to 46.7 per cent in Q3. In the industry as a whole (after taking into account private fuel retailers), IOC market share rose to 41.3 per cent in Q3 from 41.1 per cent in the preceding quarter, he said.