Indian Oil reports big profit jump as crude costs swing

UPDATE - follow-up to Crude oil prices very volatile in Q2, carried both discounts, premium at varying intervals: IOCL Official: Indian Oil Corporation saw its net profit more than double year-on-year to ₹21,630 crore in the second quarter. Stronger refining margins and a brief drop in global benchmark oil prices helped drive this earnings growth.

Procurement And LPG

Procurement costs swung widely during the quarter. The company bought crude at discounts of up to $5 per barrel and paid premiums as high as $12. This followed a first-quarter range running from zero to a $18 premium. Meanwhile, cooking gas under-recoveries stood at ₹184 per cylinder in September. That figure rose to ₹229 in October and is projected to hit ₹309 in November and ₹370 in December, according to Director of Finance Anuj Jain.

Sourcing Mix

Russian crude made up about 55% of the company's supply basket during the first half of the fiscal year. Middle Eastern supplies from Saudi Arabia and Dubai accounted for 24%. Africa contributed 10%, Brazil made up 7%, and the U.S. and Venezuela provided the remaining shares. Spot purchases formed roughly 87% of total procurement during this period.

Context

State-owned refiners in India regularly navigate complex global supply chains and fluctuating international crude markets to meet domestic energy demands. Under-recoveries happen when oil marketing companies sell cooking gas below the cost of production, leading to revenue gaps that are closely watched by market investors.