India’s three state-run fuel retailers have swung back to profit in a big way, earning a combined standalone net profit of Rs 30,106 crore in the July–September quarter. The result, reported by Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) in their second-quarter filings, is 68.3 per cent higher than the same period last year and a sharp reversal from a combined loss of about Rs 18,150 crore in the previous April–June quarter.
The September quarter alone equals about 39 per cent of the three companies’ combined profit of Rs 77,281 crore for the whole of FY26, according to the filings. The earnings boost came primarily from high refining margins and inventory gains, which more than offset losses on fuel sales and a mounting unpaid LPG subsidy bill.
Indian Oil accounted for the bulk of the earnings, reporting its highest-ever standalone quarterly net profit of Rs 21,630 crore, almost three times the Rs 7,610 crore recorded a year earlier. IOC attributed its record performance to improved refining margins and strong contributions from its petrochemical and gas businesses, along with an estimated Rs 7,000 crore inventory gain as a temporary fall in crude prices between mid-June and mid-August reduced feedstock costs.
BPCL and HPCL moved in the opposite direction on headline profit, even as their refining businesses improved sharply. BPCL’s standalone net profit fell 22.5 per cent year-on-year to Rs 4,993 crore, while HPCL’s declined 9 per cent to Rs 3,483 crore. But their gross refining margins told a different story: HPCL earned $32.15 for every barrel of crude processed, compared with $8.80 a barrel a year earlier, while BPCL’s margin rose to $32.53 per barrel from $10.78.
The contrast exposes the peculiar economics of India’s public-sector fuel retailers. Petrol and diesel prices have remained unchanged since May and domestic LPG rates frozen since March, even as benchmark prices and crude costs surged. The companies were losing Rs 4–5 per litre on petrol and Rs 18–20 on diesel until last month, industry sources said, and LPG under-recoveries stood at Rs 184 per cylinder in September.
Those under-recoveries are accumulating into a large overhang. The three firms had accumulated fuel under-recoveries of Rs 67,900 crore by 30 September, with IOC accounting for Rs 32,505.69 crore, BPCL for Rs 17,334.40 crore and HPCL for Rs 18,048.82 crore. IOC’s finance director said on an investor call that LPG under-recoveries were expected to rise to Rs 229 per cylinder in October, Rs 309 in November and Rs 370 in December.
Indian Oil itself warned that profitability in coming quarters could be hit by inventory losses if crude prices fall as the situation in the Middle East normalises. The September-quarter results, then, are best read as two stories at once: a strong but uneven refining rebound, and a fuel-pricing system whose unpaid bills keep growing behind the headline profit.
