Lower marketing margins were a major factor in Indian Oil Corp.'s roughly 81% first-quarter profit decline, which was announced on Tuesday. For the three months that ended on June 30, the state-owned company's standalone net profit decreased to Rs 2,643 cr, or around USD 316 million.

The profit from producing refined goods from a single barrel of oil, or IOC's average gross refining margin, decreased to $6.39 per barrel from $8.34 per barrel a year earlier.

The third-largest economy in Asia had significant fuel consumption during the quarter due to both general election-related activities and healthy industrial activity.

Nonetheless, competing state-owned refiners like Hindustan Petroleum and Bharat Petroleum reported a decline in their bottom lines for the quarter as a result of weaker refining margins, raising concerns about the continued increase in the price of crude oil, a vital raw material for refiners.

India is the third-largest importer and user of oil worldwide. About one-third of India's five million barrels per day of refining capacity is under the ownership of Indian Oil and its subsidiary Chennai Petroleum.