BENGALURU (Reuters) – Indian Oil Corporation (IOC) reported a 52% fall in fourth-quarter profit on Tuesday, on inventory losses and as the company sold fuel below market prices.
WHY IT’S IMPORTANT
While India is the world’s third-biggest oil importer and consumer, Indian Oil along with its unit Chennai Petroleum controls about a third of India’s five million-barrels-per-day refining capacity. [O/INDIA2]
India has been increasingly buying cheap Russian oil, however, discounts have narrowed from $30 per barrel in 2022 to less than $10 this year, while the refiners have also cut fuel prices at pumps ahead of the general elections this year.
BY THE NUMBERS
IOC reported a 52% fall in profit at 48.38 billion rupees ($579.77 million) for the quarter ended March 31.
Refiners buy crude oil and process it after a gap of 45-60 days. An inventory gain is booked when oil prices rise by the time the company refines the crude and sells the fuel.
Crude oil prices have jumped about 15% so far this year.
Indian fuel prices were stagnant through the fiscal year 2023-2024 even as the market price for refined products in Asia rose, leading to losses for the local refiners.
IOC’s revenue from operations fell 2.7% to 2.2 trillion rupees.
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GRAPHIC
($1 = 83.4468 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng)
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