OMC stocks rise up to 2% on BPCL's strong commentary post-Q4 results
Shares of oil marketing companies climbed up to 2% on May 20 after the Bharat Petroleum Corp Ltd management said it is allocating funds with a target to accrue ownership of at least 6–7 million tonnes per annum of crude oil in the long term.
"We are targeting around 6 to 7 million metric tonnes of crude we should have our own. That is the reason we have allocated capital," VRK Gupta, director, finance, BPCL told analysts and investors in a post-earnings conference call, reported Informist.
Gupta also said that there was no shortage of retail fuels such as petrol and diesel, or even crude oil. "Even if we see our refinery shares, the operations are continuing at 118% of refinery capacity utilisation. That means crude is available," he said.
At 1:35 pm on May 20, BPCL, IOC, HPCL shares were trading 1%-1.5% higher.
BPCL is recalibrating its crude import strategy almost daily and ramping up spot purchases after the U.S.-Israeli conflict with Iran disrupted Middle East supplies, Chairman Sanjay Khanna said on Tuesday.
India, the world's third-largest oil importer and consumer, has been hit by rising crude prices and supply disruptions following the closure of the Strait of Hormuz. Government raised the retail prices of petrol and diesel twice in a week.
BPCL had planned to source about 55% of its crude requirement for 2026/27 through annual contracts, mainly from Middle Eastern producers, and the rest through spot markets.
But force majeure declarations by some Gulf suppliers have pushed BPCL to increase spot buying to keep refineries running at 115% capacity, Khanna said.
"Definitely, our spot volume has gone up considerably in recent times because of all the uncertainty."
BPCL operates three refineries in India with a capacity to process 706,000 barrels per day of oil.
The state-run refiner meets 40%-45% of its crude needs with Russian oil bought largely in the spot market after Washington granted sanctions waivers, Khanna said, although discounts have narrowed sharply.
Premiums on Russian crude have fallen to $5 to $6 per barrel to dated Brent on a delivered basis from $10 to $12 earlier, finance director Vetsa Ramakrishna Gupta said.
Despite recent fuel price hikes, BPCL continues to incur a revenue loss of 25 to 30 rupees (26 to 31 U.S. cents) per litre on diesel and 10 to 14 rupees per litre on petrol, Gupta said.
BPCL expects spot purchases to ease if Saudi Arabian contracted supplies improve after the restoration of the Kingdom's east-west pipeline capacity.
Saudi Arabia is currently giving only "a small commitment” for supplies through the pipeline, Gupta said.
BPCL is also evaluating annual supply deals with new producers for next year if they offer flexible delivery terms and competitive pricing, although the company prefers sourcing from nearby regions over distant suppliers such as Venezuela and Canada.
The refiner also has an optional annual crude purchase arrangement with Brazil.
BPCL reported a flat net profit in the quarter ended March 31 after it took an impairment loss of Rs 4,349 crore on its upstream assets.
Net profit of Rs 3,191.49 crore in January-March - the fourth quarter of the 2025-26 fiscal year - compared with Rs 3,214.06 crore earning in the same period a year back and Rs 7,545.27 crore profit of the preceding quarter, according to a stock exchange filing of BPCL.
The quarterly profit came despite the company suffering huge losses on selling petrol, diesel, and cooking gas LPG below cost in March, as it, along with other state-owned fuel retailers, insulated the domestic market from volatility that hit the international market after the start of the West Asia conflict.
The full impact of the ongoing war-driven disruption in global energy markets will be visible in the June quarter.