(Reuters) – State-run explorer Oil India reported a smaller-than-expected second-quarter profit on Tuesday, weighed down by lower crude prices and tepid fuel demand.
Its standalone profit grew nearly six-fold to 18.34 billion rupees (about $218 million) in the three months ended Sept. 30, but was lower than analysts’ expectations of 18.72 billion rupees, according to data compiled by LSEG.
Oil India’s standalone earnings exclude profit from its joint ventures and operations outside the country.
Data from India’s oil ministry showed that fuel demand dipped domestically during the quarter, as above-average rainfall reduced the need for diesel-powered irrigation and farm machinery usage. Sales of automobiles, another key diesel demand driver, also dropped.
Meanwhile, global crude oil prices [LCOc1] slumped nearly 17% in the three-month period, further hurting the explorer’s bottom line.
Oil India, which operates exploration and production assets mostly in the northeastern part of the country, said its revenue from operations fell 6.6% to 55.18 billion rupees, missing estimates.
Analysts on average expected revenue of 57.73 billion rupees.
The company’s quarterly profit rise was aided by a 52% decline in excise duty costs to 2.73 billion rupees as India this year scrapped the windfall tax it had levied on petroleum crude in 2022.
The scrapping of the windfall tax on crude oil came as global oil prices softened in comparison to 2022.
Peer ONGC is set to report its quarterly results later in the month.
($1 = 84.0870 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Abinaya Vijayaraghavan)
