Indian Oil Reports ₹2,661 Crore Q1 Loss
Indian Oil Corporation reported its first quarterly loss in 15 quarters as higher crude oil costs and controlled retail fuel prices pushed petrol and diesel marketing margins into negative territory.
Indian Oil Reports ₹2,661 Crore Loss
The state-owned refiner recorded a standalone net loss of ₹2,661 crore for the quarter ended June 30, compared with a profit of ₹5,689 crore during the corresponding period last year.
The result marked Indian Oil’s first quarterly loss since the September 2022 quarter. Revenue from operations nevertheless increased by approximately 26% to ₹2.76 lakh crore, reflecting higher product prices.
Indian Oil also recognised ₹3,622 crore in government compensation for losses incurred on domestic liquefied petroleum gas sales.
Crude Oil Surge Hits Fuel Margins
Average Brent crude prices were approximately 45% higher than a year earlier as the conflict in West Asia disrupted global energy supplies. Indian Oil’s raw-material costs consequently increased by 77%, while total expenses climbed by about 32% to ₹2.80 lakh crore.
Higher costs pushed the company’s fuel-marketing operations into losses because retail earnings were insufficient to cover procurement expenses.
Petrol marketing margins averaged a negative ₹10.60 per litre during the quarter, while diesel margins averaged a negative ₹18.40 per litre, according to market estimates.
Indian Refiners Face Industry-Wide Pressure
Indian fuel consumption weakened during the quarter, declining year-on-year by 4.6% in April, 6.5% in May and 3.1% in June. Lower demand added to the pressure created by higher crude prices.
Bharat Petroleum and Hindustan Petroleum also reported quarterly losses after elevated oil costs reduced their marketing margins. All three state-controlled retailers kept domestic fuel prices below cost for parts of the quarter.
Indian Oil has since increased spot-market crude purchases to offset reduced supplies from the Middle East and maintain refinery operations.
