Sequentially, the profit also declined from Rs 26.43 billion recorded in the April-June period. IOC faced a decline in refinery margins and incurred under-recoveries from selling domestic cooking gas (LPG) at government-regulated prices, which were lower than its production costs.

For the six-month period ending on September 30, IOC recorded an under-recovery on LPG of Rs 88.70 billion. The company earned $4.08 per barrel from refining crude oil into fuels like petrol and diesel, a sharp decrease from the gross refining margin of $13.12 per barrel a year ago.

Pre-tax earnings from the downstream fuel retailing business plunged significantly to Rs 100.03 million, down from Rs 1.77 trillion in the July-September 2023 period. Revenue from operations also declined, reaching Rs 1.95 trillion in July-September from Rs 2.02 trillion in the previous year, as global oil prices softened.

IOC and other state-owned fuel retailers, including Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL), had benefited last year by holding petrol and diesel prices steady despite declining costs. This price freeze was defended as a measure to offset the losses incurred by these retailers in the previous year when they had refrained from raising retail prices, despite rising costs.