IndianOil, India’s largest refiner, announced on Monday a staggering 98.6% drop in net profit for the quarter ending September. This decline was attributed to weak fuel demand during the monsoon season and low marketing and refining margins.
The company reported a net profit of just $21.4 million (1.8 billion Indian rupees) for the July to September quarter, marking a nearly 99% decrease compared to the same period last year.
This profit slump is largely due to inventory losses and lower refining margins during the current quarter, according to IndianOil, which is the world’s third-largest crude oil importer.
IndianOil’s revenues also experienced a decline, both for the July-September quarter and for the first half of its fiscal year, from April to September.
The average Gross Refining Margin (GRM) for the April to September 2024 period fell to $4.08 per barrel, a significant drop from $13.12 per barrel in the same timeframe last year. Additionally, refining throughput decreased to 34.9 million metric tons for the first half of the year, down from 36.5 million tons during the same period in 2023.
Typically, fuel demand in India decreases during the monsoon season, which lasts from July to September. This year, however, the weak demand was worsened by lower-than-expected overall consumption in Asia, including China, negatively impacting refining margins across all regions.
In September, India’s fuel consumption reached a two-year low due to heavier-than-usual monsoon rains. Fuel demand dropped by 1.7% year-on-year and 2.7% from August, hitting the lowest level since September 2022.
Looking ahead, India’s crude oil demand is expected to increase by 4% in the final quarter of the year, driven by the festival season and heightened agricultural activity following the monsoon.
As one of the largest consumers of crude oil, India relies heavily on imports to meet its demand, with about 85% of its consumption covered by foreign oil sources.
Related Topics:
- What Can I Use Instead of Fuel Oil?
- Is Fuel Oil and Kerosene the Same Thing?
- How Much Is Fuel in England?