Petrol Margins Turn Positive as OMC Fuel Losses Ease in Q2FY27
OIL & GAS

Petrol Margins Turn Positive as OMC Fuel Losses Ease in Q2FY27

Fuel marketing losses at state-run oil marketing companies (OMCs) narrowed sharply in the September quarter, supported by lower crude oil prices and the full impact of retail fuel price increases, according to Emkay Research. The improvement was highlighted in the research firm’s oil and gas sector preview for Q2FY27.

Petrol marketing margins, excluding the impact of the windfall levy, improved to Rs. 2.9 per litre in Q2FY27 from a loss of Rs. 12 per litre in the previous quarter. Diesel marketing losses also narrowed to Rs. 16.7 per litre from Rs. 32 per litre, although diesel sales remained loss-making during the quarter.

The improvement followed significant pressure on OMC fuel marketing margins in the June quarter, when higher crude prices affected profitability. Losses on domestic liquefied petroleum gas (LPG) sales also declined, with under-recoveries narrowing to around Rs. 290 per cylinder during the quarter.

Aviation turbine fuel (ATF) margins improved after regular price increases were implemented from July. Refiners also received support from inventory gains during the quarter, as Brent crude averaged around USD 97 per barrel, down 6 per cent from the previous quarter.

Crude prices, however, ended the quarter at around USD 120 per barrel, sharply higher than approximately USD 72 per barrel at the end of Q1. Emkay Research said the late-quarter increase could result in significant inventory gains for some refiners. The firm expects the improvement in fuel marketing margins, lower LPG under-recoveries and stronger ATF margins to support OMC earnings in Q2FY27.

Fuel marketing losses at state-run oil marketing companies (OMCs) narrowed sharply in the September quarter, supported by lower crude oil prices and the full impact of retail fuel price increases, according to Emkay Research. The improvement was highlighted in the research firm’s oil and gas sector preview for Q2FY27. Petrol marketing margins, excluding the impact of the windfall levy, improved to Rs. 2.9 per litre in Q2FY27 from a loss of Rs. 12 per litre in the previous quarter. Diesel marketing losses also narrowed to Rs. 16.7 per litre from Rs. 32 per litre, although diesel sales remained loss-making during the quarter. The improvement followed significant pressure on OMC fuel marketing margins in the June quarter, when higher crude prices affected profitability. Losses on domestic liquefied petroleum gas (LPG) sales also declined, with under-recoveries narrowing to around Rs. 290 per cylinder during the quarter. Aviation turbine fuel (ATF) margins improved after regular price increases were implemented from July. Refiners also received support from inventory gains during the quarter, as Brent crude averaged around USD 97 per barrel, down 6 per cent from the previous quarter. Crude prices, however, ended the quarter at around USD 120 per barrel, sharply higher than approximately USD 72 per barrel at the end of Q1. Emkay Research said the late-quarter increase could result in significant inventory gains for some refiners. The firm expects the improvement in fuel marketing margins, lower LPG under-recoveries and stronger ATF margins to support OMC earnings in Q2FY27.

Related Stories

Gold Stories

Next Story
Equipment

“Road maintenance technologies will play a bigger role in India.”

Interview with Magesh Swaminathan, CEO, Infraserve GlobalInfraserve Global was recently launched as a separate brand. Could you tell us more about the company and its journey?InfraServe Global (ISG) is part of the Gainwell Group, which carries an 82-year legacy in the construction equipment sector through its Caterpillar dealership, TIL cranes and other product lines. ISG earlier operated as the Allied Business division out of our Pune facility and has now been carved out into a dedicated business entity — InfraServe Global.ISG has been officially launched at bauma CONEXPO India, marking a n..

Next Story
Real Estate

India's Real Estate Investment Shifts to Income Growth: JLL

India's commercial real estate market is entering a new phase of value creation, with investor returns increasingly driven by rental income growth, operational efficiency and strategic asset selection rather than capitalisation rate compression, according to JLL's report, A Decade of Change: The Institutionalization of Commercial Real Estate in India.The report indicates that high-quality office assets can continue to deliver double-digit unlevered internal rates of return (IRR) over a typical five-year investment period, supported by resilient net operating income (NOI) growth and sustained o..

Next Story
Infrastructure Urban

Copeland Expands Scroll Compressor Manufacturing in India

Copeland has expanded its manufacturing capabilities in Atit, Maharashtra, becoming the first company to manufacture scroll compressors in India. Production began in December 2025, marking a significant milestone in strengthening domestic manufacturing capabilities for heating, ventilation, air conditioning and refrigeration (HVACR) applications.The expansion forms part of Copeland's Rs 5 billion investment initiative announced in 2024, which also includes strengthening its engineering and innovation capabilities in Pune. The investment aims to support India's growing HVACR market while enhanc..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code