**Indian Oil Corporation Reports 64% Decline in Q3 Net Profit Amid Inventory and Forex Losses**
New Delhi, Jan 27 (PTI) – Indian Oil Corporation (IOC), the largest oil company in India, announced a significant 64% decrease in its net profit for the December quarter, primarily due to inventory and foreign exchange losses that offset the benefits of record fuel sales. The standalone net profit for the October-December 2024 period, which is the third quarter of the fiscal year 2024-2025 (FY25), stood at ₹2,873.53 crore, a sharp decline from ₹8,063.69 crore reported in the same quarter the previous year, as per the company’s stock exchange filing. However, the profit showed a remarkable increase compared to the ₹189.01 crore earned in the preceding July-September 2024 quarter.
The IOC Director (Finance) attributed the profit decline to inventory and foreign exchange losses, along with a decrease in product cracks. The company recorded an inventory loss delta of ₹7,800 crore in the third quarter, with an additional ₹1,900 crore attributed to forex losses. Inventory loss occurs when a company purchases oil at a certain price, but by the time it is processed and shipped to India, prices have dropped. Since product prices are linked to current market rates, this loss is recognized. Conversely, inventory gains are recorded if prices rise.
Additionally, the cracks—the difference between the cost of crude oil and the price of finished products—declined significantly. For diesel, the crack fell from USD 19.18 per barrel in October-December 2023 to USD 10.8, while for petrol, it decreased from USD 7.04 per barrel to USD 3.63 per barrel in the same period of 2024. The company also experienced a reduction in refining margins, earning USD 2.95 for each barrel of crude oil processed, compared to a gross refining margin of USD 13.53 per barrel in the same quarter of the previous fiscal year.
IOC Chairman A S Sahney highlighted that the company achieved its highest-ever quarterly sales of 26.134 million tonnes, marking a 6.2% increase from the previous year, as IOC refocused on its core competency in fuel sales. Petrochemical volumes rose by 7%, and gas trading volumes surged by 24% during the quarter. The company also gained market share, increasing from 46.4% in PSU sales in Q2 (July-September) to 46.7% in Q3. In the broader industry context, including private fuel retailers, IOC’s market share rose to 41.3% in Q3 from 41.1% in the previous quarter.
