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Informist, Thursday, Jul. 23, 2026

 

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--BPCL: Increased sourcing of spot cargo to 69% in Apr-Jun vs 44% year ago 
--CONTEXT: Comments by BPCL management in post-earnings analyst call
--BPCL:  Diversified crude oil sourcing in Q1, Russian procurement at 38% 
--BPCL: Procured more crude oil from Venezuela and Angola
--BPCL: To sell 10-kg LPG cylinder in 100 more cities in 24 states by Aug 15 
--BPCL: Have tied up crude oil for Aug, in process to source for Sept needs
--BPCL: Have 3.8 mln tn of crude oil in inventory, enough for 35 days 
--BPCL: Generally import up to 3.2 mln tn of crude oil every month
--BPCL: Hope to begin operations at Mozambique LNG plant in FY29 
--BPCL: Average crude oil price now at $95-$96/bbl vs $99/bbl as on Mar 31
--BPCL: Had crude oil inventory of 2.72 mln tn as of Jun 30 
--BPCL: No discounts on procurement of Russian crude oil currently
--BPCL: Cumulative LPG under-recovery at INR 158.04 billion as on Jun 30 
--BPCL: Saw 14-15?growth in LPG usage Apr-Jun due to shortage of supply
--BPCL: LPG usage may stay stable or fall in Jul-Sept

 

By Sunil Raghu and Ashutosh Pati
 
AHMEDABAD/MUMBAI – Bharat Petroleum Corp. Ltd. has diversified crude oil sourcing beyond West Asia and maintains an inventory of about 35 days to help overcome any shortfall of its key raw material in the near term, the company's management told analysts and investors in a post-earnings conference call Thursday. However, the state-owned oil marketing company is confident and has not changed its guidance of investing INR 250 billion in capital expenditure over 2026-27 (Apr-Mar).

 

The state-owned oil refiner and marketer, which has refining capacity of 41 million tonnes per annum, is able to source only around 3 million tonnes of crude domestically every year. It imports the remaining 37-38 million tonnes of crude from outside India, importing nearly 3.2 million tonnes of crude every month.
 
"... Due to disruptions in tied up term crude volumes, we proactively optimised our crude sourcing by significantly increasing spot crude purchases, with the spot percentage rising to almost 69% in Q1FY27, from 44% in the corresponding previous year," V.R.K. Gupta, director, finance, Bharat Petroleum Corp., said.

 

BPCL has also diversified its crude sourcing outside of the Strait of Hormuz, exploring multiple geographies, including increasing the Russian crude grades to 38% of its total procurement during the June quarter. "We also procured two new crude grades from Venezuela and Angola. The procurement strategy was achieved by overcoming multiple hurdles, including vessel availability, placement of freight, insurance, etc," BPCL finance director said.

 

BPCL official said they have begun receiving offers to buy crude for the September month, including the Russian Urals crude grade. "...We have to wait maybe next one week. We will come to know what will be the discount scenario," he said, adding that based on the recent developments in the crude market, no one was offering a discount for the Russian crude. Gupta, however, said BPCL has already tied up crude oil from the months of July and August, with average crude oil price at $95-$96 per barrel, compared with $99 per barrel it cost the company on an average as of Mar. 31.

 

Giving details of inventory that the company holds, Gupta said as on Jun. 30, their crude oil inventory was at 2.72 million tonnes. Generally the company keeps inventory for 35 days, he added. The company's refinery throughput fell to 10.15 million tonnes from 10.42 million tonnes in the year-ago quarter. The throughput of the company's refineries in Mumbai and Kochi fell over 4% on year each to 3.77 million tonnes and 4.31 million tonnes, respectively, in Apr-Jun.

 

BPCL's gross refining margin for the quarter jumped sharply to $41.41 per barrel in the June quarter, from $4.88 per barrel in June quarter a year ago. The gross refining margin is the difference between the cost of crude oil and the value of refined products. It is a key indicator of the pricing, profitability, and financial health of refineries.

 

The company posted a net loss of INR 39.62 billion for the June quarter, a turnaround from a profit of INR 61.24 billion in the year-ago quarter, with its revenue for the quarter jumping 34.5% on year to INR 1.59 trillion.

 

On under-recoveries faced by the company, the BPCL official said that as of Jun. 30, cumulatively the under-recovery on liquefied petroleum gas stood at INR 158.04 billion. However, LPG sales declined nearly 21% on year to 1.69 million tonnes during the June quarter. "Firstly, we have seen the LPG domestic de-growth in Q1. Significant de-growth. It's a double digit, almost 14 or 15?-growth," Gupta said. "And we are expecting a little bit de-growth even during this quarter also. Main reason for de-growth in the Q1 is mainly a little bit shortage of the supply."

 

BPCL is also planning to sell its recently-launched 10-kilogram light-weight LPG cylinder across 100 cities by Aug. 15. It had recently launched this lightweight cylinder in Mumbai.

 

The company, like other oil marketing companies in the country, too, diverted substantial proportion of its refining to make LPG, which was in shortfall owing to closure of Strait of Hormuz following the war in West Asia. This led to a curtailment in sales of many other products that the refineries of BPCL could have churned out. This saw domestic market sales of the refining major rise marginally to 13.62 million tonnes from 13.58 million tonnes in the year-ago quarter. Its diesel and petrol sales rose around 8?ch to 6.56 million tonnes and 3.11 million tonnes, respectively. 

 

The oil refiner's outstanding debt, excluding lease liabilities, increased 62% on year to INR 174 billion in the June quarter. The company's debt-to-equity ratio rose to 0.19 from 0.12 in the year-ago quarter. Gupta said the company has investment of around INR 125 billion, taking the net borrowings for the company around INR 50 billion.

 

Despite challenges and debt levels, the finance director said they were sticking to their earlier guidance of full year capital expenditure target of INR 250 billion for FY27, compared with INR 204 billion spent in FY26. Of the FY27 capex, nearly INR 110 billion would be spent on three major projects at Kochi, Mumbai and Bina refineries, INR 100 billion on new retail outlets and infrastructure expansion, INR 29 billion on city gas distribution network and INR 22.50 billion for equity infusion for the ongoing projects of subsidiary Bharat PetroResources Ltd.

 

On the company's investments in Mozambique, the management said that 42% of the work has been completed. The company has invested in the Rovuma Offshore Area 1 gas project in Mozambique through a subsidiary. The investment is to secure access to liquefied natural gas supplies from East Africa and strengthen the company's global upstream portfolio and diversify beyond West Asia. The company hopes to receive the first LNG cargo from this project in 2028-29 (Apr-Mar).
 
At 1423 IST, shares of BPCL traded at INR 310 per share on the National Stock Exchange, down 1.3% from the previous close.  End

 

US$1 = INR 96.55

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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