State-run oil companies Indian Oil, Bharat Petroleum, and Hindustan Petroleum reported combined net losses of ₹18,149 crore in the June quarter, according to reports from ET Now. This figure was substantially lower than the government's earlier estimate of around ₹75,000 crore, highlighting the significant gap between projected and actual losses. Minister of Petroleum & Natural Gas Hardeep Singh Puri addressed a press conference on July 2, confirming that the three firms incurred losses of ₹74,781 crore in the June quarter. As per CNBC TV18, the losses were better than what the street had been fearing, despite being due to sharp surge in crude oil prices due to the US Iran war, which sent brent crude to as high as $125 a barrel. The combined loss was significantly lower than the ₹78,481 crore that Petroleum Minister Hardeep Singh Puri had estimated the companies had incurred from retail fuel sales during the quarter.
The refining segment continued to deliver strong performance for these companies, which resulted in the losses being curtailed during the quarter, as reported by CNBC TV18. According to brokerage firm Motilal Oswal, the strong refining performance was partly offset by the marketing segment, with companies like HPCL and BPCL incurring double-digit losses in marketing margins for the quarter, while for Indian Oil, that figure was negligible. HPCL has the highest exposure to the marketing segment, followed by BPCL. The companies' gross refining margins (GRM) showed BPCL at ₹41.4 per barrel, IOC at ₹36 per barrel, and HPCL at ₹23.4 per barrel.
LPG under-recoveries emerged as a major challenge during the quarter, with domestic LPG losses surging dramatically from ₹80 per cylinder during the March quarter to as high as ₹510 per cylinder during the June quarter, and remaining at nearly the same levels of around ₹490 per cylinder in July, according to CNBC TV18. This represents a significant deterioration in the cooking gas segment's profitability. HPCL highlighted that while there is no concern regarding the availability of Crude or LPG, pricing remains the key risk, and it also said that it could not refine the most optimal crude during the quarter.
Despite the challenging quarterly results, shares of all three OMCs are currently trading with losses between 14% to 21% for the year so far, as volatile as the year has been for crude oil prices, as reported by CNBC TV18. After the correction seen in the stock price, shares of BPCL, Indian Oil, and HPCL are trading at 7.8 times, 6.7 times, and 6.9 times their financial year 2028 estimated Earnings Per Share (EPS), respectively. Indian Oil Corporation stated in its earnings call that the situation remains highly dynamic, and that the crude price premium continues to fluctuate.
While the ₹18,149 crore quarterly losses mark a sharp reversal from these companies' combined net profits of ₹16,184 crore a year earlier, they reflect only a fraction of the government's projection. As reported by ET Now, Indian Oil, BPCL, and HPCL had reported combined profits of ₹77,280 crore last fiscal year. Oil ministry officials indicated that losses in the June quarter could erase the companies' profits for FY26, emphasizing the severity of the current financial situation. According to CNBC TV18, the companies' Q1 losses were HPCL: ₹11,526 crore, BPCL: ₹3,962 crore, and IOC: ₹2,661 crore, compared to their Q4 profits of HPCL: ₹4,901 crore, BPCL: ₹3,191 crore, and IOC: ₹11,377 crore. Crude prices averaged $100.74 per barrel during the quarter, up from $83.01 in the previous quarter.
