Nov. 4 (Bloomberg) -- Idemitsu Kosan Co., Japan’s second- biggest refiner, cut its full-year profit forecast by 24 percent as flagging demand for fuels and higher costs reduce the profitability of processing crude oil.

The refiner reduced its net income outlook to 13 billion yen ($144 million) from the 17 billion yen forecast earlier, it said in a statement to the Tokyo Stock Exchange today. Sales may drop to 3.14 trillion yen from 3.22 trillion yen.

Idemitsu follows Nippon Oil Corp. and Nippon Mining Holdings Inc., which both cut their profit forecasts last week, citing deteriorating margins after oil prices almost doubled in six months and domestic demand waned. Oil consumption in Japan, the world’s third-biggest energy consumer, is falling at a faster-than-expected pace as the population declines and as consumers switch to cleaner fuels.

For the six months ended Sept. 30, Idemitsu’s net income fell to 5.84 billion yen from 18.9 billion yen a year earlier. Sales dropped to 1.44 trillion yen from 2.28 trillion yen.

The shares dropped 0.8 percent to close at 6,670 yen on the Tokyo Stock Exchange today. The benchmark Topix index rose 0.08 percent. Idemitsu has lost 10 percent in six months, and fell to the lowest in almost nine months on Nov. 2, ending the session at 6,620 yen.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.

Last Updated: November 4, 2009 01:17 EST