Indian Oil Q2 profit drops 99% due to inventory losses

Indian Oil Corporation's (IOC) massive 98.6 per cent drop in second-quarter earnings was mainly due to inventory losses even as operating performance was robust, a top official said Tuesday.

company posted a standalone net profit of Rs 180.01 crore in second quarter of current 2024-25 fiscal year compared to a profit of Rs 12,967.32 crore a year back, according to a stock exchange filing by company. profit also declined sequentially, when compared to an earning of Rs 2,643.18 crore in April-June period.

IOC Director (Finance) Anuj Jain said company suffered over Rs 4,200 crore of inventory loss in July-September against an inventory gain of about Rs 8,300 crore a year back.

IOC is India's largest oil refining and marketing company, controlling about half of market. Being backbone of Indian fuel supply system, it has to maintain stocks and supplies irrespective of price or carrying cost of it. Seven out of nine refineries of company are inland, and company holds up to 45 days of crude oil inventory.

company has historically booked inventory losses whenever global oil prices have fallen, he said.

IOC earned only $1.59 on turning every barrel of crude oil into fuel in second quarter compared to a gross refining margin of $18.11 per barrel a year back.

" inventory losses and fall in refining margins more or less make up for difference in previous year and this year's earnings," he said.

In dition to above, IOC h an under-recovery on LPG of Rs 8,870.11 crore as of September 30, filing showed.

IOC sold 21.931 million tonnes of petroleum products during second quarter as compared to 21.941 million tonnes a year back and 24.063 million tonnes in April-June period.

Its refineries processed 16.738 million tonnes of crude oil, down from 17.772 million tonnes in July-September 2023 and 18.168 million tonnes in April-June 2024, it said.