The three state-owned oil marketing companies reported a combined standalone profit after tax (PAT) of Rs 30,106 crore in the second quarter of the current financial year, up 68.3% from Rs 17,884 crore in the corresponding period last year, with Indian Oil Corporation's (IOC) record earnings offsetting a decline in profits at Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL).
The strong earnings came despite petrol and diesel prices remaining unchanged at retail outlets since the second half of May, even as international crude oil prices remained volatile and came under pressure from geopolitical developments. The price freeze meant that oil companies faced pressure on their marketing margins as their costs moved with global fuel prices.
IOC reported its highest-ever quarterly standalone PAT of Rs 21,630 crore, nearly three times the Rs 7,610 crore recorded in the year-ago quarter. The company said improved refining margins, along with strong earnings from its petrochemical and gas businesses, supported its performance. It also cited a temporary decline in crude oil prices between mid-June and mid-August.
The record profit came despite an outstanding LPG subsidy burden of Rs 32,506 crore during the quarter. IOC did not disclose its gross refining margin (GRM) for the September quarter.
In contrast, HPCL's standalone PAT declined to Rs 3,483 crore from Rs 3,830 crore a year earlier, while BPCL's standalone profit fell 22.5% to Rs 4,993 crore from Rs 6,443 crore.
The decline came despite both companies reporting strong refining margins. HPCL's GRM rose to $32.15 per barrel in Q2 FY27 from $8.80 a year earlier, while BPCL reported a GRM of $32.53 per barrel against $10.78 in the year-ago quarter.
The high refining margins, which reflect earnings from processing crude oil into petroleum products, could not fully offset the pressure on fuel marketing operations. BPCL also reported a marketing inventory loss of Rs 330 crore and a foreign exchange loss of Rs 397 crore during the quarter.
The results highlight the contrasting performance of the three companies. While higher refining margins and earnings from other businesses helped IOC post record profits, HPCL and BPCL faced pressure from the gap between international fuel prices and domestic retail rates.
