Tailwinds for oil marketing companies

Crude and gas prices have dipped and OPEC-plus is hiking supply, bringing cheers to India which is a massive energy importer.

- DEVANGSHU DATTA

Downstream businesses like the oil marketing companies (OMCs) and gas players will gain the most from this cheap energy.

For OMCs, cheaper oil and gas equate to better margins.

OMCs such as Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) and Indian Oil (IOCL) reported strong gross refining margins (GRMs) and marketing margins in the fourth quarter of the financial year 2025 (Q4FY25). They are still experiencing under-recoveries on gas, but this may reduce in future and the government may compensate for under-recoveries. All three companies have steady dividend payouts.

In BPCL's Q4FY25 results, the Ebitda and Adjusted PAT stood at ₹7,760 crore and ₹4,550 crore, down 16 per cent and 18 per cent year-on-year (YoY), respectively.

The core GRM was at $7.5 per barrel. The refining capacity utilisation was at 121 per cent. Inventory gain per barrel was about $1.7 (versus a loss of $0.9 in the prior quarter and a gain of $0.5 a year ago). The core marketing Ebitda was ₹1.4 per litre (₹4 in the prior quarter, negative ₹2 a year back).