State-Owned Oil Giants Witness Dramatic Profit Slump Amid Regulatory Pressures

Indian Oil Corporation, BPCL, and HPCL, state-owned oil giants, saw up to 90% drop in their June quarter earnings, despite record profits in the previous fiscal year. The slump comes amid falling margins and under-recoveries on domestic LPG sales. The dramatic profit fall prompted the government to scrap an earlier announced equity infusion plan.

State-owned oil giants Indian Oil Corporation (IOC), BPCL, and HPCL have reported a significant decline in earnings for the June quarter, with drops nearing 90%. This dramatic slump follows record profits in the previous fiscal year.

IOC's standalone net profit fell 81% in the April to June quarter of the current 2024-25 fiscal year to Rs 2,643.18 crore, compared to Rs 13,750.44 crore a year earlier. Similarly, HPCL posted a 90% drop in profit, and BPCL witnessed a fall to Rs 2,841.55 crore.

The primary reasons cited are falling margins and under-recoveries on domestic LPG sales. Following these results, a planned Rs 30,000 crore equity infusion was scrapped by the government, impacting the firms' energy transition plans.