BPCL posts Rs 3,962 crore Q1 loss as high crude prices squeeze fuel margins

Summary

State-owned Bharat Petroleum Corporation Ltd (BPCL) on Wednesday reported a consolidated net loss of Rs 3,962.13 crore for the April-June quarter of FY2026-27, its first quarterly loss in 15 quarters, as elevated crude oil prices and regulated fuel prices eroded marketing margins. The company had posted a net profit of Rs 3,333.97 crore in the corresponding quarter of the previous financial year, according to a stock exchange filing. The sharp reversal came after state-run fuel retailers kept petrol, diesel and LPG prices below cost for much of the quarter despite a surge in global crude oil prices following the escalation of the West Asia conflict. Fuel price controls hit profitability BPCL, along with Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL), did not raise petrol and diesel prices for nearly two-and-a-half months even as crude oil prices jumped by more than 50% after the US and Israel attacked Iran on February 28 and Tehran retaliated. While the three oil marketing companies increased petrol and diesel prices by over Rs 7.50 per litre in the second half of May, the hike was still insufficient to offset higher input costs. Similarly, the Rs 89 increase in the price of a 14.2-kg LPG cylinder covered only around one-fifth of the required increase, PTI reported. BPCL said its quarterly loss was "mainly due to suppressed marketing margin on certain petroleum products which was partially offset by higher refining margin." The company, however, did not disclose its gross refining margin for the quarter. Reuters, citing Jefferies analysts, reported that petrol and diesel marketing margins averaged negative Rs 10.6 per litre and Rs 18.4 per litre, respectively, during the quarter, meaning the cost of selling fuel exceeded the earnings from retail sales. LPG losses, higher costs weigh on earnings BPCL said it incurred an LPG under-recovery of Rs 3,485.22 crore during the April-June quarter. The company also said unpaid LPG subsidy dues stood at Rs 12,318.52 crore as of March 31, 2026. According to Reuters, the company received government compensation of Rs 1,898 crore for losses in the LPG segment during the quarter, helping lift overall revenue despite weaker fuel demand. Revenue from operations rose to Rs 1.59 lakh crore during the quarter from Rs 1.35 lakh crore a year earlier, increasing more than 23% year-on-year. However, total expenses climbed around 36% to Rs 1.66 lakh crore, driven by a 68.7% surge in raw material costs. Fuel sales decline amid weaker demand BPCL sold 13.62 million tonnes of petroleum products during the quarter, slightly lower than 13.86 million tonnes in the corresponding period last year. Its refineries processed 10.15 million tonnes of crude oil, down from 10.40 million tonnes in the year-ago quarter. India's fuel demand also weakened during the quarter, with consumption falling 4.6% in April, 6.5% in May and 3.1% in June compared with the same months last year, reflecting softer demand in the world's third-largest oil importer and consumer.