Net profit in October-December fell to Rs 902.96 crore, or Rs 15.03 per share, from Rs 940.29 crore, or Rs 15.64 a share, the company said in a statement.
This was primarily because the subsidy it pays to fuel retailers so that they can sell diesel and cooking fuel at government fixed rates, rose 11.5 per cent to Rs 2,173.48 crore.
Also, crude oil production slipped 3 per cent to 0.894 million tonnes in the quarter. Natural gas output marginally inched up to 0.679 billion cubic meters from 0.674 bcm in Q3 of last fiscal.
Turnover was up 8.5 per cent to Rs 2,730.38 crore.
OIL said the gross crude oil price in the quarter was USD 108.11 per barrel, almost unchanged from a year ago, but after extending subsidy discounts to refiners the net price realised was USD 52.11 a barrel.