Crude oil procurement remained volatile during the September quarter, with Indian Oil Corporation (IOC) sourcing supplies at discounts of up to $5 per barrel and premiums of as much as $12, Anuj Jain, Director (Finance), told investors during a post-results call on Saturday.
The Delhi-headquartered refiner’s net profit more than doubled year-on-year to ₹21,630 crore in the second quarter, supported by improved refining margins and a brief decline in benchmark crude oil prices.
Mr. Jain said LPG under-recoveries stood at ₹184 per cylinder in September before rising to ₹229 in October. These are projected to increase further to ₹309 in November and ₹370 in December.
Diversified crude basket
Explaining the volatility in procurement costs, he said crude purchases during the quarter ranged from a discount of $5 per barrel to a premium of $12 against prevailing benchmark prices. In the first quarter, the range was from zero discount or premium to a premium of $18 per barrel.
Effective procurement prices depend on several factors, including whether supplies are contracted on a free-on-board (FOB) or delivered-at-place (DAP) basis, freight costs and the grade of crude.
Russian crude accounted for around 55% of IOC’s crude basket during the first half of the fiscal, followed by supplies from the Middle East, primarily Saudi Arabia and Dubai, at 24%. Africa, including Angola and Nigeria, contributed about 10%, while Brazil accounted for 7%. Supplies from the U.S. and Venezuela made up the remaining 2-5% and 3-4%, respectively.
Around 87% of the company’s crude procurement during the period came through spot sourcing. Mr. Jain said.
Spot purchases not always expensive
Responding to a question on whether spot purchases entailed higher costs, he said such sourcing did not necessarily mean paying a premium, as prices varied across region/geography.
“Now, within spot you have Russian crude. Sometimes, we are getting a high discount, sometimes we are paying a premium as well,” Mr. Jain said.
“In the few months, we have seen huge, discounted crude coming in from Iraq. So, the moment it is available, we are buying huge quantities from Iraq also. That used to be our staple diet before the [West Asia] crisis as well.”
He added that procurement economics were also influenced by effective negotiations, which played an important role in determining the final price.
Published – October 31, 2026 09:25 pm IST
