Indian Oil PSUs Report ₹30,106 Crore Profit in Q2 FY26
State-run oil companies see significant profit despite ongoing fuel sale losses.
Combined profit of IOC, BPCL, and HPCL reached ₹30,106 crore in Q2 FY26.
The profit marks a 68.3% increase from the previous year and offsets earlier losses.
Under-recoveries on LPG subsidies reached ₹67,900 crore by September end.
In the second quarter of the financial year 2026, India's three major state-run oil companies, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), reported a remarkable combined net profit of ₹30,106 crore. This figure represents nearly 39% of their projected annual earnings, driven by improved refining margins and inventory gains that outweighed losses from fuel sales and a growing unpaid LPG subsidy bill.
The reported profit reflects a substantial increase of 68.3% compared to the same quarter last year and is a significant recovery from a combined loss of approximately ₹18,150 crore in the previous quarter (April-June). The earnings for this quarter alone account for a significant portion of the companies' anticipated total profit of ₹77,281 crore for the entire financial year.
Despite the profitability, the companies faced challenges with petrol and diesel prices remaining unchanged since May, and domestic LPG rates stagnant since March. Industry insiders indicated that the companies were incurring losses of ₹4-5 per litre on petrol and ₹18-20 on diesel. IOC's Director of Finance, Anuj Jain, highlighted that under-recoveries on LPG reached ₹184 per cylinder in September, increasing to ₹229 in October, with projections of further rises in the coming months.
The financial results underscore the uneven performance among the companies, with IOC leading the way with its highest-ever quarterly net profit of ₹21,630 crore, nearly three times the profit recorded in the same quarter last year. In contrast, BPCL's profit fell by 22.5% to ₹4,993 crore, while HPCL's profit decreased by 9% to ₹3,483 crore. The disparity illustrates how refining gains and contributions from other sectors have benefited these companies differently, while their fuel retail operations remain vulnerable to fluctuations in international prices versus domestic rates.
Looking ahead, IOC has cautioned about potential pressures on profitability in the upcoming quarters, particularly due to possible inventory losses stemming from a decline in crude oil prices as the geopolitical situation stabilizes in the Middle East. The oil market remains volatile, with prices firming up again in October, suggesting that the companies may face further challenges in maintaining their profit margins.
