Ladies and gentlemen, good day and welcome to the Indian Oil Corporation Limited Q1 FY 2027 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan from Antique Stock Broking Limited. Thank you, and over to you, sir.
Thank you, Avirath. Good afternoon, ladies and gentlemen. It is a pleasure to welcome all the participants to the first-quarter FY 2027 results call of Indian Oil Corporation. We have with us Mr. Anuj Jain, Director of Finance; Mr. Nitin Kumar, ED of Corporate Finance and Treasury; and Mr. Pramod Jain, CGM of Treasury. Without much ado, I would like to hand over the floor to Mr. Anuj Jain for his opening remarks.
Thank you, Mr. Varatharajan. Dear investors and analysts, a very good afternoon to all of you. I take this opportunity to welcome all of you to the conference call organized by us, post -announcement of the first quarterly results of financial year 2026/2027. I thank each one of you for joining the call. I trust you have had an opportunity to review the results we have posted on our website, exchanges, and the updates that have been shared with you. In today's call, we would like to walk you through our performance for the quarter gone by, provide some insights on the broader macroeconomic context, and also share with you the strategic initiatives we are pursuing to strengthen our position as India's largest energy company.
Before I move to the operational and financial highlights, let me briefly touch upon the evolving geopolitical developments and their implications for the global energy markets. Since the last call, the global energy landscape has continued to evolve at a rapid pace. While the announcement of a 60-day truce between the United States and Iran in mid-June showed signs of moderation in concerns over supply disruptions, the overall environment remained marked by geopolitical uncertainty, evolving sanctions, and the reconfiguration of global trade and energy flows. Recent renewed military escalations in the Middle East have once again brought the security of critical maritime energy corridors, particularly the Strait of Hormuz and the Red Sea, into sharp focus, reminding us that volatility remains an inherent feature of the global energy ecosystem.
Energy security now depends not only on resource availability but also on resilient supply chains, diversified sourcing, and operational agility in a complex global environment. I'm pleased to inform you that Indian Oil has once again demonstrated these strengths by ensuring uninterrupted energy supplies across the country with reliability and resilience. Indian Oil continues importing secure, reliable, economically competitive crude oil grades from diverse countries while managing challenges of high market volatility and logistic challenges in terms of ships, insurance, and freight costs, among other things. Amidst disruption, we diversified our sourcing by increasing imports from other geographies like Russia, Venezuela, Brazil, and even African countries, thereby ensuring continuity of crude oil imports to maintain our planned refinery operations. The spot imports for the quarter stand at about 84%, against 51% in the last year.
As regards our operational performance for Q1 financial year 2026/2027, we reported a net loss of INR 2,661 crores, compared with the profit after tax of INR 11,378 crores in the preceding quarter, that is quarter four of financial year 2025/2026, and profit after tax of INR 5,689 crores in the corresponding quarter of financial year 2025/2026. The reported loss needs to be viewed in the context of heightened geopolitical tensions and ongoing conflicts, which led to significant volatility in the international crude oil product prices and exerted considerable pressure on marketing margins on retail fuel, particularly impacting the quarter's profitability. Revenue from operations during the quarter stood at INR 275,972 crores against INR 232,855 crores in the immediately preceding quarter of this year. The sequential increase in revenue was mainly driven by higher product prices. The revenue for the corresponding quarter of financial 2026 was INR 218,608 crores.
While the global environment remains uncertain, with geopolitical developments continuing to pose challenges for energy markets, our commitment remains steadfast. We remain fully committed to safeguarding the nation's energy security and ensuring uninterrupted energy supplies across the country while navigating these challenges with operational resilience and supply chain agility. At the same time, our focus extends firmly beyond the immediate environment. We continue to maintain a strong emphasis on long-term strategic growth initiatives aimed at strengthening our core businesses, expanding our capabilities across the energy value chain, and supporting India's growing energy requirements. Friends, now the professional financial highlights will be briefed by Mr. Nitin Kumar, Executive Director, Corporate Finance and Treasury. Over to you, Nitin.
Thank you, sir. Dear investors and analysts, a very good afternoon. Kindly note that today's discussion may include forward-looking statements, which are based on currently available information, assumptions, and expectations, and are subject to uncertainties that could cause actual results, performance, or achievements to differ materially from those expressed or implied. Participants are advised to refer to the company's latest filings with regulatory authorities for a more detailed discussion on the risks and uncertainties. Before turning to our numbers, let me briefly touch upon the macro backdrop against which this quarter played out. The U.S. Federal Reserve has held its benchmark rate in the range of 3.5%-3.75% through the quarter, with elevated inflation readings keeping the door open to further tightening rather than cuts.
On the domestic front, RBI's Monetary Policy Committee has similarly kept the repo rate unchanged at 5.25%, maintaining a neutral stance, even as it flagged upside risks to inflation from elevated crude prices and global geopolitical tensions. Taken together, these signals of a continued higher-yield environment for the foreseeable near term . Coming to the forex market, the rupee remained volatile during Q1 of this year, depreciating to a quarterly low of about INR 96.83 per USD in mid-May on U.S.-Iran escalations and the Strait of Hormuz closure before recovering to around 94.67, aided by RBI's measure and U.S.-Iran ceasefire announcements. The rupee is currently trading in the range of INR 95-INR 96 per USD and continues to remain under pressure driven by global geopolitical developments.
As for the PPAC report, MS and HSD consumption grew a healthy 7% and 5% sequentially over the previous quarter, reaffirming the resilience of India's mobility and industrial demand, even amidst the calibrated pricing adjustment in response to volatile global markets. ATF volumes, however, contracted by around 5%, reflecting suspended international routes following recent airspace closures and softer air travel on the back of higher fares. LPG volumes declined by roughly 20%, largely a structural outcome of tighter regulatory norms on commercial supply and the government's demand optimization measures. Monsoon, after a weak start, has since picked up its momentum, though distribution across regions remains uneven. The progress of the monsoon will remain an important variable for rural demand, agriculture output, and consequently, for fuel consumption patterns in the agri- and mobility segments.
The average price of crude, that is Indian Crude Basket during this quarter, increased to $100.74 a barrel from $83.01 a barrel in the immediately preceding quarter, that is Q4 of 2025/2026, which tantamount to increase of about 21% due to ongoing U.S.-Iran conflict leading to supply disruptions. Let me briefly touch upon the quarterly performance highlights. While we responsibly absorb the portion of international crude spikes to shield the domestic market from inflationary pressures, our overall volume footprint remains solid, unequally positioning us for rapid margin recovery as global energy dynamics normalize and our optimized product mix takes full effect. Talking about the numbers, let me briefly touch upon the major verticals. Refineries. During the quarter, refinery achieved crude throughput of 19.2 MMT with a capacity utilization of 109.4% in comparison to throughput of 19.7 MMT and capacity utilization of 113.9% during the preceding quarter.
For Q1 2025/2026, the throughput was at 18.7 MMT with a capacity utilization of 106.7%. Our refineries have achieved the lowest ever quarterly fuel and loss of 8.04% post-BS6 scenario. Pipelines. During the quarter, pipeline has achieved the highest ever quarterly throughput of 28.5 MMT with capacity utilization of 79.9%, vis-à-vis 27.7 MMT during the preceding quarter with capacity utilization of 78.3%. During the corresponding quarter of 2025/2026, the capacity utilization was about 73.5% with a throughput of 26.3 MMT. Marketing. The total sales volume during the quarter was 26.211 MMT as compared to 27.343 MMT, during Q4 2025/2026, and 26.328 MMT in Q1 of financial year 2025/2026. During the quarter, 320 retail outlets were commissioned, taking the total number to 43,138. Recently, Indian Oil has launched Indane XTRALITE NOW, a 10 kg composite LPG cylinder offering express four-hour home delivery.
Simultaneously, the popular 5 kg Indane Chhotu cylinder will also now be available on express home delivery along with 10 kg Indane XTRALITE NOW cylinder. Indane XTRALITE NOW offers customers a smart LPG experience through express delivery, minimal documentation, seamless digital booking, and enhanced convenience. Launched initially in Pune, Gurugram, Indore, and Coimbatore, the offering will subsequently be expanded to other cities in a phased manner. Petrochemicals. The sale of petrochemical products, including exports during this quarter, was 0.768 MMT, compared to the sale of 0.901 MMT in the preceding quarter. Gas. During the quarter, we registered gas sales of 1,873 TMT, which includes CGD sales of 67 TMT as compared to total gas sales of 1,814 TMT, which includes CGD sales of 54 TMT during the preceding quarter. Renewable energy.
Our wholly owned green subsidiary company, Terra Clean Limited, has received connectivity approval of 2.65 GW capacity on Central Transmission Utility and State Transmission Utility. Project activities are in progress for setting up a 100 MW wind power project in the state of Gujarat. Additionally, UPNEDA, which is the Uttar Pradesh New and Renewable Energy Development Agency, has allotted 423 acres of land in the state of Uttar Pradesh for the development of a solar power plant of around 100 MW. Terra Clean Limited is aggressively exploring commercial and industrial customers across India for providing reliable green power through long-term power purchase agreements under the group-captive open access mode. Indian Oil is working to strengthen its position at the forefront of India's biofuel and energy transition agenda, aligning with the nation's twin objectives of energy security and decarbonization.
Across hydrogen and green hydrogen, ethanol, biodiesel, compressed bio-gas, and sustainable aviation fuel, the corporation continues to scale commercial capacity and deepen its partner ecosystem. CapEx. During April to June 2026, the company incurred a total CapEx of INR 6,461 crore, encompassing investment across verticals. The budgeted CapEx target for this year is INR 32,700 crore. These investments are aligned with our long-term strategic roadmap and national energy priorities. The major refining and petrochemical expansion projects across Panipat, Barauni, Gujarat, and Paradip are at an advanced stage of execution and are targeted for completion during 2026/2027. Phase-wise commissioning of process utilities and offsite facilities is being undertaken in a structured manner to enable progressive capacity build-up and integration. So far as Panipat refinery expansion is concerned, it is expected to be completed by December 2026, Barauni by December 2026, and Gujarat by November 2026. Borrowings.
With respect to the borrowing levels, the borrowing as on 30th June 2026, was at INR 141,453 crore level compared to INR 110,668 crore as on 31st March 2026. The increase in the borrowing was mainly on account of higher working capital requirements. As of 30th June 2026, the company's gross debt/equity ratio stood at 0.71x, reflecting a comfortable leverage profile. After adjusting for financial investments, the net debt/equity ratio further strengthens to 0.51x, positioning us well to pursue growth opportunities, absorb market volatility, and maintain financial strength across cycles. With these words, I take a pause here and request Director of Finance for his further remarks.
Thank you, Nitin. I would like to extend my sincere appreciation to our investors and all stakeholders for their continued confidence and support. As India's energy landscape evolves, we remain committed to playing a pivotal role in meeting the country's rising energy demand while simultaneously advancing the nation's energy transition objectives. We will continue to pursue growth with discipline, resilience, and with long-term perspective, creating sustainable value for all our stakeholders. With that, I will end my briefing here. We would now be happy to take your questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press the star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity, sir, and congratulations for a resilient performance . What has been a very challenging quarter. My first question was actually a slightly broader one from a CapEx standpoint. The presentation shared earlier by the company very clearly shows that most downstream investments will actually be completed in calendar year 2026. Just wanted your view on how you are looking at actual allocation for maybe the next two to three years. Will renewables be almost taking up the entire amount of focus? Are there any downstream, brownfield, or greenfield projects that you're still looking at? Just your perspective on how the capital allocation for IOCL would look, sir, from a two to three -year perspective, will be very useful. That's my first question.
Yeah. Thank you. As you have known, we normally do a CapEx between INR 30,000 crore and INR 40,000 crore in a year. Our major expansions are getting over in this year itself. If you see from next year onwards, we still have many petchem projects where our CapEx will continue to be spent. As you are aware, we plan to enhance our petchem intensity from 6.5% to 15%. Estimated CapEx on the same would be around INR 100,000 crore over the next five to six years. All these projects are in the various stages of approval. As a thumb rule, various projects are under discussion, whether it's renewables, whether it is petchem, biofuels, or you have seen shipping, we are trying to acquire a few ships. All these put together, our CapEx should be between INR 30,000 crore and INR 40,000 crore in the next two to three years also.
Got it, sir. That's pretty useful. The second question was more about in this quarter, the GRM that you have mentioned, which is net of SAED. If the SAED or export tax was not there, just as a hypothetical, what would the normalized GRM have looked like? If we can quantify the SAED impact on a per-barrel basis.
You know our reported GRM is $15.59 per barrel.
Right.
GRMs depend upon many factors, but to be very specific, if you add SAED, it would be around $36 per barrel for Indian Oil Corporation.
That would have been the gross number if we were
Yes.
Include SAED.
Yes. $36.
Got it, sir. One last question, if I may, sir. How much has LPG loss per cylinder reduced in the current quarter, and what was it per cylinder for us in Q1?
I will give you the month-wise data.
Sure.
In the month of June, after the price revision, my under-recovery per cylinder was in the range of INR 665 per cylinder. Which, in the month of July, the figures may vary, but it was around INR 475 per cylinder. August, it came down because the Saudi CP came down significantly.
Okay.
You know that the Saudi CP came down from INR 796 to INR 592.
Right.
Now Saudi CP has again gone up from INR 592 to INR 632.
Okay.
We expect that during this quarter, it should be around INR 250 per cylinder.
That would be the average roughly is what we are anticipating.
Yeah, that would be average in Q2, assuming that the same Saudi CP continues for the next month as well.
Understood.
The under-recovery has come down significantly vis-à-vis July.
Got it, sir. Thank you so much. That was very useful. I'll come back in the—
Can I also add that everything depends upon the geopolitical situation? You would have seen that—
Of course, sir.
We were seeing the downward trend; suddenly it has started showing an upward trend.
Right. No, of course, sir. That is obviously there. Appreciate that. Thank you, sir.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Yeah, good afternoon. Two questions. Firstly, was there any inventory impact on the GRMs in Q1? Also, on the marketing side, was there an inventory impact?
See, yes, there was an inventory impact on GRMs, and there was an inventory gain on finished goods. We had the impact on both. If you talk about the crude side, we had an impact of $3-$4.
This was loss or gain?
It was a loss.
Okay.
In case of finished goods, we had a gain. That also helped us to mitigate our losses for this quarter.
Okay. Finished good gains could be around INR 6,000 crore or INR 7,000 crore. I'm just making a rough guess based on some of your peers.
No, it was a little bit on a higher side because, as you know, we are carrying a huge inventory in our system. It was around INR 15,000 crore.
INR 15,000 crore for the quarter?
Yeah.
Okay, sir. Fair enough. This was mostly for all the products, right? Petrol, diesel, and LPG everywhere there were price increases.
Yes.
Okay. Fair enough.
Not because of price increase, there are many other factors.
I don't want to say it was on account of price increase. It was on account of variation in the pricing.
Okay. Fair enough. Sir, secondly, on your project, can we see the full impact of the refining projects in FY 2028 in terms of any escalation in GRMs also? That could take still more time. I know you have taken it up in the past also, but can you just again revise us on what the expectation is? Also the PX-PTA project, which you have stated that it will commission soon. When is that expected to add to earnings?
As we have said, most of the projects are going to be commissioned in Q3 of 2026/2027. Definitely our installed capacity will go up, and all the time, the refining throughput will come in phases. Next year, our crude projection is definitely on a higher side. We expect in 2027/2028, my throughput should be somewhere around 85 MMTPA.
Right. Any GRM escalation?
GRM is nothing to do. GRM will all depend upon the play between the crude oil prices and the product prices in the international market. We cannot predict what would be the GRM next year.
Okay, sir. Fair enough. Thank you so much and all the best.
Yeah.
Thank you. The next question is from the line of Nitin Tiwari from PhillipCapital India. Please go ahead.
Hi, sir. Good afternoon. Thanks for the opportunity. Once again, congratulations on a very resilient performance. This was a very difficult quarter. Following on the question of previous participant, once our refinery expansions are concluded, of course, commenting on GRM is difficult, but can you comment on yield? Would it be possible for us to improve our yield over 80% that we usually have from our refinery?
You already know that this is one of the best performance distillate yield and our losses are also minimum, and we continue to improve it. With the new modern expansion happening, we definitely expect that our GRMs should improve.
Okay. Sir, what kind of yields can we expect? Can we expect that our yield would improve to mid-80%? Is that a possibility from 80%?
I can't give the specific number, but I would say that since IOC will be able to process a higher portion of value-added products- The returns are definitely going to go up.
Okay. Right, sir. Sir, secondly, I just wanted to understand a little bit on our pricing policy. The previous quarter was, of course, an anomalous one, but from mid-May onwards we did take some pricing fees. Given that the crisis in West Asia has again cleared up, right? Where do we stand in terms of petrol and diesel? Are we making losses in these products again, and are we considering any price revisions, if you can comment on that. How do we go about understanding your pricing action if we have to go in there?
As far as pricing is concerned, it is very dynamic. The situation is so dynamic that you can see it is changing on a day-to-day basis. Broadly, I can say that we remain engaged with the concerned authorities on this issue. Particularly I talk about the LPG, and we are hopeful that we would be getting reasonable support from the government of India on LPG. Based on the past experience also, we have seen that the government has fully extended support to PSU OMCs.
Therefore, on LPG, based on the past practice, we are confident that suitable compensation for LPG underrecoveries will be considered. Yes, there would be uncertainty in the timing of compensations and the quantum, but we are definitely sure that on the LPG part we are going to get support. As far as the other products are concerned, the situation remains very dynamic, and many factors affect the pricing. It depends upon the crude cost, the product margins, exchange rate movements, the trade market, the insurance markets, inventory gains and losses. Many things will be affected. All these factors would be considered, and appropriate decisions will be taken.
Sure, sir. Lastly, if I may just continue on the pricing question, sir. What was the increase in the commercial diesel price that we had taken? The retail, I suppose, was INR 7.5, how much was the commercial diesel price change, if you may please highlight that? Also, what is the portion of commercial diesel sales in our overall diesel sales?
Just give me one minute. See, commercial diesel prices are always moving in tandem with the international market.
Okay.
The HSD prices for commercial consumers have always been the international market prices.
Based on the contracted terms, whatever discounts it is being passed as per the contracted terms. I would broadly say that even today, the prices have got modified. For these things, product prices move on as per the—
Any indicative number in INR per liter that you can tell us, which we are charging for commercial consumption?
If you say 10%-15% of my total HSD volume is bulk volume.
Okay.
On that factor, if you want to factor in that, these prices would be moving as per the international prices.
All right, sir. Understood, sir. Thanks so much, sir, for answering my question. I'll get back in the queue.
If you want to have specific data, my team would be happy to give you after this con-call what the consumer prices have been in the past three to four months.
Great, sir. That would be really helpful. Thanks so much for answering my question, sir. I really appreciate it.
A reminder, anyone who wishes to ask a question may press star and one on the touchtone telephone. The next question is from the line of Vivekanand from Ambit Capital. Please go ahead.
Hi. Thanks for the opportunity. I have two questions. The first one is with respect to the landed cost of crude. If you can help us understand the buildup of that, let's say the physical cost plus insurance and freight. How does it compare versus, let's say, Q4? Let's say just when the crisis began in March, how much of a premium or discount on the Brent were you getting crude landed in India versus how it is now? Has there been any change in trend in the last month also? That would be great if you can help us with that. That's my first question. The second one is on the supply chain. What more can you do in terms of, let's say, improving the ability of Indian oil companies to source crude without being at the mercy of market vagaries?
I understand that there is some MoU between the MoPNG and the Ministry of Shipping, is there any progress there? If you can talk about this topic. Thank you very much.
See, whenever we talk about crude prices, I think it would be very important to benchmark. At what benchmark were we buying before the war happened, and what we are doing today? Luckily, I can tell you, because it keeps on changing on each transaction what we are doing. Pre-war, generally, the IOC was buying Brent $-1 or $-2 in the market. Since the war has started, you all know that the crude oil prices have gone very high. We had a procurement cost of around $10 per barrel over Brent during the peak of the war. It keeps on changing. Overall impact, I would say it was somewhere around $10, if you see. In the month of July, again, it came down to $2 to $3 per barrel, and again, it is going up.
It is moving on a fortnight-to-fortnight basis or day-to-day basis. Yes, on the overall summary, you can say there was an impact of $10 per barrel on the peak of the war situation. Coming to your second question, what we are doing for the supply chain? I think I would say definitely we have diversified our portfolio. You would have seen that we are not dependent on one single source. Yes, the Middle East remains the main source; we have diversified our sourcing. Russian crude, whether it is West African crude or Latin American crude, all these crudes have significantly diversified. Based on the geopolitical situation, we keep on changing our sourcing strategy.
You would have seen that now, even in the past quarter, since the Middle East volume got affected, we have increased our procurement from South America, we have increased our procurement from West Africa, Russia, and Venezuela. Even in the USA, a few cargos came. It was a very diversified procurement strategy, which helps a company like Indian Oil. Coming to your third question regarding what the status of the JV MoU between MoPNG and Shipping is. Yes, that is also one of our strategies, which even started before the war started. We wanted to have a shipping tonnage security as well. I would say under the aegis of MoPNG and the Ministry of Shipping, on 19th September, a non-binding MoU was signed. In this, Indian Oil shall be exploring to procure four MR vessels to start with.
This is a JV where we have other partners; other oil and gas partners would be there. This working is going on. Tenders are already out. We are just seeing how much we can have a tonnage security by way of this joint venture company.
Thanks, Anuj, for the detailed answer. Just one follow-up on the first question. The $10 overall impact that you mentioned, this is versus the Brent Crude. Secondly, does it include shipping and logistics costs, or is it?
All inclusive.
Are there—
It is all inclusive. All inclusive.
Okay. Okay. This is for the overall portfolio now, right?
It is for the overall portfolio, yes.
Okay. Thank you very much.
Yes.
Thank you. The next question is from the line of Keshav Soni from Kotak Bank . Please go ahead.
Yeah. Thanks for the opportunity. I have a question on ethanol blending. What is the volume of ethanol that IOCL sourced in this quarter? Any indicative price of what the cost was on a per-liter basis this quarter versus the same quarter last year?
As per the Government of India policy, Indian Oil has achieved a 20% target of ethanol blending. This is at par with the other oil marketing companies. As far as pricing is concerned, we have different types of ethanol, and each product will have its independent pricing. On a basket basis, it is blended with the MS, and it is sold to the customers.
Okay. Understood. I have one more question in terms of combined losses of OMCs. I think during the beginning of this quarter, the government was saying that the total losses could be as high as INR 75,000 crore in this quarter, but the reported number of all three OMCs, including IOCL, is significantly better. Any specific reason for that?
There were many factors that helped us. First of all, the excise duty was reduced. The prices were increased in multiple tranches. When this figure was given, it was in the beginning of April, but subsequently, in the month of June, the prices came down significantly. Practically, the impact of June was not that much of what we observed in the initial months. You would have seen the con-call; all the oil companies had positive inventory gains. All these factors put together helped us to mitigate this situation.
Okay. Sure. Thanks for the detailed answer.
Thank you. The next question is from the line of Sanjay Mookim from JP Morgan. Please go ahead.
Thank you. Good afternoon, sir. I just wanted to follow up on the question from the earlier participant. On the 16th of June, sir, media reports suggested the Oil Secretary saying the OMCs are hitting borrowing limits, sir. If I look at the changes in debt for yourself and for the other OMCs, there doesn't seem to have been any cash flow stress or any material cash flow stress at all. How do I reconcile the comment from the Oil Secretary on the 16th of June versus what has been reported, sir?
If you see, my borrowings have gone up. If you see on 31st March, my borrowings were INR 110,000 crore, and on 30th June, they have gone to INR 141,000 crore. There was a significant jump within these three months itself, if you see. Nonetheless, I would say my debt-equity ratio is still good, because we had a very good financial year , 2025-2026. My debt-equity ratio, even after this increase, still remains 0.7x. If you look at the absolute numbers, my borrowings have gone up significantly by INR 31,000 crore in one quarter itself. Because it is not the first time oil sector companies have seen this type of borrowing level, we have a banking arrangement to take the money from the banks at very competitive rates and to manage the situation.
The situation remains very strong. In one quarter, if our borrowings goes up by INR 31,000 crore.
No, sir. I was just commenting on the fact that the secretary said companies are unable to borrow more, and that sounded like a distressed situation. Like you say, it doesn't look that bad.
No. I have not seen that statement. Money is always available in the market. The issue is at what rate you will get. What he probably would have meant is that they're not able to get the money at the same rates what they were getting if we had a comfortable position. Definitely, if you go to the market with INR 31,000 crore borrowing in one quarter, your cost will go up. Each company will have its own profile. In our case, having a very strong balance sheet, we still manage it. I will not be wrong to say that my interest cost went up from what rates we were buying before the war.
Sure, sir. If I may follow up on the second sort of clarification. Historically, when we've seen that crude falls through a quarter, this quarter, the opening crude and closing crude is very different, and crude closing is much lower than where it was at open. Historically, in such situations, we have seen IOCL report very large inventory losses. In this quarter, at least the accounts don't seem to suggest that a material loss has been booked. Is that the right understanding, and how do I reconcile that?
No. You have to compare the crude prices on the 31st of March and whatever after the Ind AS impacts everything on the 30th of June 2026. On an overall basis, this quarter, if you talk about the 31st of March, my inventory was somewhere around $87 per barrel, and on the 30th of June, it was somewhere around $83. I had an inventory loss on crude this time. As I said in the first question itself, on the finished goods side, I have an inventory gain because the quotes in the international market of gasoil, gasoline , and all the products, went up. There we had an inventory gain. On crude, we had a marginal inventory loss.
Sorry, sir. You said you marked your crude on June 30th at $83, is it?
Yes.
Bloomberg, it says $70. That's why the confusion, sir.
I don't know about Bloomberg or what they said.
Right. All right. Thank you very much.
Thank you. The next question is from the line of Saurabh Handa from Citigroup. Please go ahead.
Thank you for the opportunity. My first question is on CapEx. With most of your refining expansions getting completed this year, one would have expected maybe a moderation in CapEx going forward, and one of your OMC peers is also talking about being a little bit more prudent on CapEx and bringing down their CapEx intensity given some of the balance sheet issues. Could you comment on that? You are still looking at INR 30,000 crore-INR 40,000 crore CapEx going forward. Doesn't this sort of situation maybe warrant a rethink, especially given there is still uncertainty on any support from the government?
If you see, Indian Oil today has an energy basket share of around 9%-10%. If you want to continue to maintain this energy share in the primary energy basket of the country, you need to continuously invest, and all the investments are definitely going to bring positive margins to the company. For the past four to five years, you have seen that we had extraordinarily good refining margins for the company. Although on the marketing side, we had a hit. As I said in the beginning, we are focusing on petchem now. There's a huge demand for petrochemicals in the country. The next cycle of petrochemicals will be done, but we don't have, as such, a targeted CapEx that we have to spend this much.
Somebody asked me, and I said, In the past we have done that, but everything would be subject to proper returns and proper due diligence. There is no, as such, target given to any one of us. Everything is evaluated on a profitability side, and we invest. I would definitely add that going forward, renewables will be one sector where we will have to invest. We have a target of 18 GW of renewable power in the next three to four years. We have a 100% owned subsidiary company, Terra Clean, where we have put in a lot of effort to start our renewables. Already four to five gigawatts are going on at various stages. Renewables will start going up, and petchem. These are the two sectors that will take my major CapEx in the next three to four years.
Apart from that, we have other CapEx also, whether it is pipelines, whether it is biogas, whether it is SAF, or whether it is green hydrogen. We are also diversifying into shipping now. There would be many sectors where we are also investing in battery swapping. Already we have a joint venture company in that. We also have a very profitable company, a fertilizer subsidiary company, and a joint venture company, giving us good returns. There are many sectors where we are investing in our company.
Thank you, sir. Just to follow up on this, two questions. One, in terms of India's energy dependence, there has been talk of some focus from the government on maybe investing in strategic reserves, and one of your upstream counterparts is setting up an SPR facility. Is there any such directive from the government to you or the OMC, say, on, I don't know, LPG storage facilities or any such thing?
I would give you just a snapshot of SPR. Today, the existing capacity is around 5.33 MMT. It is at Visakhapatnam, Mangalore, and Padur in Karnataka. Okay. There's a target to increase it to 11.83 MMT. This target is not for Indian Oil. It is a general indicated target for the entire oil and gas sector, seeing the geopolitics. We are also under discussion to see whether we can also participate in this strategic storage, but as such, there's no target or anything straightforward given to us. All these proposals are being evaluated on commercial considerations, and if we find that it is commercially viable, we will definitely be participating in SPRs as well.
Got it. Just my last question on refining expansions. I think someone else also asked this question. Besides the throughput increase, does this also lead to an increase in complexity? Is there any sort of quantification on how much you expect, say, the refining margins from these refineries to increase by? All else being equal, assuming no change in spreads, et cetera.
If you see any, even today, the distillate yield, processing loss, it all depends upon the type of crude you are buying. We are seeing the more and more new units are coming, our distillate yield is going up, and our processing loss is coming down. Definitely we can expect better returns or better margins going forward. If you see, even this quarter, we had one of the best distillate yield and our processing loss is only 8%. All these efforts are being taken. We also have a SPRINT target where all the units have been advised to achieve the quartile one in the Solomon study. Various factors will help the company to increase the refining margins, and the new units are also going to produce more value-added products. All these things are going to definitely not increase our throughput.
It will also result into better refining margins for the company.
That's great. Thank you so much.
Thank you. The next question is from the line of Sarthak Tita from DSP Asset Managers. Please go ahead.
Hi. Thank you for the opportunity. Congratulations, sir and team, to weather the difficult quarter. My question is just mainly on the ATF side. On the opening remarks, you mentioned that there has been some different demand in this quarter in terms of ATF being concerned. Just a couple of questions around that. I want to understand how many airlines or which all airlines did avail the scheme that we had, the release by the government where we were able to supply the fuel at a fixed rate. Is that facility availed by airlines?
No. See, I understand you're talking about the PSF facility, which was announced. That facility—no airlines had gone ahead to use that because by the time that facility got activated, the prices started coming down. Again, the prices have started going up. We don't know what would be the future. I can't give any futuristic statements. As far as we are concerned, we have remained fully engaged with all the airlines to support them. As far as the international pricing is concerned, we were able to pass on the entire cost to the airlines. On the domestic front, we have had a negotiated pricing, and that is still continuing.
Understood, sir. One last follow-up, sir. On the website, I can see that the prices for March have been updated for ATF. I'm assuming there would be multiple revisions post that date. Any range of price that you can guide us to in the last month or last quarter where we supplied the ATF, and if at all we can update that on the website, that would also be helpful, sir.
We continuously update our websites. Because of this, the very geopolitical situation is changing so fast that it was not always possible to keep updating and thinking. I can share one thing that domestic airlines are concerned about. The domestic airlines. Today, it is around INR 115 per liter, which we are supplying to the domestic scheduled airlines in the country.
Okay. That is the price fixed in that scheme, right?
No. Last month it was reduced. Now again, today is a pricing cycle day; again, it has been increased to INR 115 per liter. The last cycle was INR 110 per liter. Before that also, it was INR 115. Depending upon the movement in the international course of ATF, we keep on registering our selling prices to the scheduled domestic airlines. International pricing is typically going as per the market price.
Market price, yeah. Fair.
Yeah.
Got it, sir. That is from my side. Thank you. Thanks so much.
Sure.
Thank you. The next question is from the line of Kishan Mundhra from DAM Capital. Please go ahead.
Hi, sir. Thanks for taking my question. Two questions from my end, and apologies if you've already answered them because I joined in a bit late. Firstly, on all the refining CapEx and the petchem expansions that we have done so far, if you could share the expected completion timelines, and in that context, what is the total throughput that we are targeting for FY 2027 and 2028? That would be my first question. Second question is, you highlighted that petrochemical is where you see a lot of demand coming from. In that context, sir, what are the key projects that you're contemplating? Key products that you would be targeting, and what is the scale of the petrochemical expansion that we are talking about?
Okay. See, on the refining side, Panipat Refinery is being expanded from 15 MMTPA to 25 MMTPA. This project is roughly going to cost me somewhere around INR 38,000 crores, and the scheduled date of completion is December 2026. Almost this project is 94% complete as on date. As far as Gujarat Refinery expansion is concerned, from 13.7 MMTPA to 18 MMTPA, the cost is somewhere around INR 19,000 crores. The project is almost 90% complete, and the scheduled date of completion we expect is November 2026. Barauni Refinery, which is being expanded from 6 MMTPA to 9 MMTPA, is somewhere around INR 18,000 crores. It is almost 92% complete, and its scheduled date of completion is now December 2026. As far as our petrochemicals are concerned, our PX-PTA contract, which is almost 95% complete, is also expected to commission in next to one month now.
The other plant, this is the polybutadiene rubber plant at Panipat, which is costing me somewhere around INR 3,000 crores. It is also expected to get commissioned by December 2026. If I talk about these five projects, they are going to cost me somewhere around almost approximately INR 90,000 crores, or dollar terms, I can say it is almost a $10 billion CapEx, which is going to be commissioned by end of this calendar year. Going forward, we have many projects that have been approved. We have many projects, whether they are on LAB, PX-PTA . All these projects will add another 5 MMTPA of my petrochemical intensity capacity. All these projects are somewhere going to cost me INR 1 lakh crore, as I've already shared with you in the earlier question.
All these projects, something has started, some things are going to start, and we expect all these projects to be commissioned by 2029, 2030. March 2030 as of date is the expected target, maybe some here and there, five or six months.
Okay, sir. No new refining capacity being considered, what would be your FY 2028 throughput target for refining?
See, this year, although our performance is much more than my installed capacity. For 2026/2027, my throughput is expected to be around 77 MMTPA, 2027/2028, it should touch 85 MMTPA, and in 2028/2029, it should touch 90 MMTPA.
Okay. Thank you, sir.
Thank you. The next question is from the line of Bineet Banka from Nomura Group. Please go ahead.
Hi, sir. Thanks for the opportunity. One question on ethanol blending. Are we flexible to reduce the blending percentage, say, if your crude price falls to, say, $60? Because I think, according to my numbers, below $65, ethanol will become a drag on your marketing economics. This is despite no excise duty being charged on ethanol.
I don't want to give any futuristic statements in this con-call, but we are committed to achieving the target of blending, given, announced, and given by the government for all three oil companies put together. These decisions are not taken on a company-to-company basis of ethanol blending. It is taken together; whatever targets would be given, today it is 20%, and we have achieved 20%. Whatever new targets would be given, we would be able to achieve that very comfortably.
Fair enough, sir. Secondly, on petchem intensity, I think you said intensity will go up from 6% odd to 15% over the next five years. Is there any hurdle rate that we look at before making an investment in petchem? Because, according to my understanding, most of these naphtha-based petchem plants may have subpar economics, given the petchem cycle has been very weak over the last two or three years. Any hurdle rate that you are looking at?
Any investment that is a part of the capital allocation policy, all investments have to pass the hurdle rate in our system. It is on what basis you take the assumptions of the returns. If you see the refining margins, we started this refining expansion somewhere around four years back. Today, whatever refining expansions have happened or are going to happen are having extraordinary returns. The same is the case with petchem. Today, we are hopeful that petchem is a very cyclical business because the main thing is demand in the country. The demand is huge. Everything is getting imported. At some scale, one or two good years in the petchem cycle, you always recover the entire cost from the business. Petchems are being done based on my natural integration with my business. It is a part of my long-term strategy.
Indian Oil being the major company that can make huge investments with other companies, we definitely have an edge in this sector, and we are very hopeful that we will be able to give good returns to our stakeholders, as we have given because of our refining business.
Sir, just one follow-up. All these petchem capacity additions will this be naphtha-based, or will you also be open to adding, say, ethane-based crackers in the future?
We are very open to any type of input. We are open. We are not only dependent upon naphtha-based. We are open for the gas-based petrochem, petchem, whether it's a naphtha. Any type of input, we are open, and that will be the long-term strategy for the company also.
Thank you, sir. Very helpful.
Thank you. The next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead. The current participant has left the queue. The next question is from the line of Vivek Subbaraman from Ambit Capital. Please go ahead.
Hello. Thank you for the follow-up opportunity. Two questions. The first one is on the crude sourcing again. How much are you sourcing now on a long-term basis, and how much is the spot proportion? What is the pricing on the spot cargos versus long-term sourcing that you're doing? Anuj, like you gave the pre-war to now context, if you can do that for this question, it will be great. The second one is, any further update on Project SPRINT that you would like to share during the current quarter or anything that has changed because of the war that got prolonged in respect to milestones that you had set for Project SPRINT? Thank you.
As far as the crude sourcing is concerned, before the war, we were doing almost 50% spot and 50% term. Because of the prevailing geopolitical situation, it keeps on changing. If you talk about it, I can give you the average numbers for quarter one 26/27. Our spot procurement went as high as 84%, because most of the spot was coming from the Middle Eastern region. Our spot volume jumped from 50% to almost 84%. The situation is very dynamic. Something changes in the Strait of Hormuz or in the Red Sea, and things will change immediately. We keep track of the developments on a day-to-day basis and try to optimize our crude sourcing. Coming to the second point, what you said was, SPRINT target. See, as I said, SPRINT had a very positive impact on our company.
Last year, we could have saved almost INR 2,000 crore in just one financial year itself. Recently we have now SPRINT two ; we are expecting another INR 2,000 crore-INR 2,500 crore savings over and above what we achieved last year. SPRINT is not only on cost, it is on efficiency, it is on market share, it is on efficiency improvement, it is on the logistics savings, and it is on the OpEx savings. All put together, we expect that whatever we achieved last year of INR 2,000 crore savings, and this week we'll be able to achieve this year as well. This is on SPRINT. There's not only one factor that is supporting us, because we are keeping track of each and every OpEx and CapEx and trying to optimize that.
Right. Just a couple of follow-ups.
Yeah.
I understand that you are now sourcing a lot more spot versus long-term, right? Does it mean that because you're getting spot cargos from regions other than the Middle East, you would be getting some of these cargos at a meaningful discount to even long-term ones?
Other than the Middle East, we are buying on a spot basis. The pricing will change on a month-to-month basis. One thing is there, I think Indian Oil has managed to source the crude at a very optimum rate, even at the peak of the hour. Yes, our crude cost went up, which I have already shared in my con call. Definitely, the first target is to make the crude available. You all know that Russian crude availability also went up because of the many happenings on that side. We immediately increased our procurement from Russia. We increased almost up to 50%- 54%. We also increased our procurement from the South American side. Also, Venezuela crude we increased. All these factors have helped us to contain the crude cost for the company.
Definitely, if you talk about pre-war and post-war, our crude cost has gone up. That is, if you see, it's a common phenomenon in the entire oil and gas sector in India.
Right. Sure. My last one is on this new U.S. sanction that is being referred to as the Russian and Iranian hydrocarbon, right? The tariffs on that. What is the communication you've received from the government? Are you still sourcing Russian and Iranian crude, or is that now subject to other waivers that the U.S. needs to do?
That is still not implemented, actually. That is still one of the houses in the U.S. that has passed, but I think it is yet to be fully approved. I don't have the exact names through which it gets approved, but definitely it is still not fully implemented. We are tracking the developments, whether in the U.S. or any other market. Whenever it gets implemented, we will be able to mitigate that also. My colleague has given me a paper what says, The U.S. Senate has advanced and passed the bill in the Senate, but it has not yet become a law. It must clear the U.S. House of Representatives and then be signed by the President before it gets implemented. As of now, it is not implemented.
Okay. All right. Thank you very much, and all the best.
Thank you. Ladies and gentlemen, that was the last question of the day. I would now like to hand the conference over to the management for closing comments.
Yeah. Thank you all for your time and insightful questions. On behalf of the entire Indian Oil team, I appreciate your continued trust, confidence, and support. We value our engagement and look forward to future interactions and keeping you updated on our progress. Thank you very much once again. Stay safe and take care. Thank you.
Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.