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Indian Oil Corporation (IOC) has revealed a substantial surge in its net profit for the third quarter, marking a significant improvement from the challenging financial scenario in the corresponding period of the previous year. The standalone net profit for October-December 2023-24 reached ₹8,063.39 crore, a remarkable increase compared to the ₹448.01 crore profit reported a year ago. While slightly lower than the ₹12,967.32 crore earnings in the preceding quarter (ending September 30, 2023), the profit was influenced by enhanced marketing margins.
The pre-tax earnings from the sale of petroleum products witnessed a significant rise to ₹11,428.88 crore in the third quarter of the current fiscal year, compared to ₹1,541.95 crore in the same period last year. IOC's use of mostly imported crude oil for fuel production and subsequent sales through its extensive network contributed to these positive results.
In 2022, IOC, along with other state-owned fuel retailers BPCL and HPCL, froze prices amidst rising global oil prices triggered by Russia's invasion of Ukraine. This strategic move aimed to shield consumers from price volatility but resulted in losses for the companies in the first half of the 2022-23 fiscal year. However, IOC rebounded this year, posting record earnings of ₹26,717.76 crore in April-September 2023, surpassing the previous year's net profit of ₹24,184 crore.
For the nine months spanning April to December 2023, IOC reported a net profit of ₹34,781.15 crore, a significant turnaround from the loss of ₹1,816.87 crore in the same period the previous year. This nine-month figure even exceeded the highest-ever net profit recorded in the entire fiscal year 2021-22.
IOC attributed the improved profitability in the nine months to higher marketing margins and lower exchange losses. The company earned USD 13.26 on each barrel of crude oil converted into fuel during April-December 2023, compared to a gross refining margin of USD 21.08 in the corresponding period last year.
Co-head of research at Prabhudas Lilladher Pvt Ltd, Swarnendu Bhushan, noted a third-quarter gross refining margin of USD 13.5 per barrel, with a calculated gross marketing margin of ₹3.8 per litre.
The company's sales volume in the December quarter reached 23.32 million tonnes of petroleum products, a slight increase from 23.17 million tonnes last year and 21.94 tonnes in the preceding quarter. IOC's refineries processed 18.5 million tonnes of crude oil into fuel during October-December, up from 18.2 million tonnes last year.
Chairman S M Vaidya highlighted that IOC sold 72.27 million tonnes of petroleum products, including exports, during April-December. The corporation's refining throughput for the first nine months of FY 2023-24 was 55.02 million tonnes, with a throughput of 77.03 million tonnes through the nationwide pipeline network during the same period.
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