India’s three state-run fuel retailers earned a combined standalone net profit of Rs 30,106 crore in the July-September quarter. That is close to 39 per cent of what they made in the whole of the last financial year. Strong refining margins and inventory gains more than made up for losses on fuel sales and a growing pile of unpaid LPG subsidy.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) together made 68.3 per cent more than in the same quarter a year ago, company filings show. The result also marks a sharp turnaround from a combined loss of about Rs 18,150 crore in April-June.
For comparison, the three companies’ combined profit for FY26 (April 2025 to March 2026) was Rs 77,281 crore.
Prices frozen, yet profits rose
The improvement came even though petrol and diesel prices have been frozen since May and domestic LPG rates have not changed since March. Benchmark prices and crude oil costs have risen sharply over the period.
Industry sources said the companies were, until last month, losing Rs 4-5 a litre on petrol and Rs 18-20 a litre on diesel.
LPG losses are widening
IOC Director (Finance) Anuj Jain said on an investor call on Saturday that LPG under-recoveries were Rs 184 per cylinder in September. They rose to Rs 229 in October and are expected to climb to Rs 309 in November and Rs 370 per cylinder in December.
Petrol and diesel prices are deregulated, so the companies must absorb any loss. LPG remains a regulated product, and the government is expected to compensate the companies for the gap between the retail price and the actual cost.
Subsidy payments have not arrived on time. As a result, the three companies’ accumulated fuel under-recoveries stood at Rs 67,900 crore at the end of September, according to the filings. IOC accounted for Rs 32,505.69 crore, BPCL for Rs 17,334.40 crore and HPCL for Rs 18,048.82 crore.
IOC drives the quarter
IOC supplied most of the profit. It reported its highest-ever standalone quarterly net profit of Rs 21,630 crore, almost three times the Rs 7,610 crore a year earlier. That single quarter equals nearly 59 per cent of its FY26 profit of Rs 36,802 crore.
The picture was different at the other two. BPCL’s standalone net profit fell 22.5 per cent from a year earlier to Rs 4,993 crore. HPCL’s profit fell 9 per cent to Rs 3,483 crore. Both had reported much higher profits in the year-ago quarter.
The split shows that refining gains and income from other businesses have helped the three companies unevenly. Their retail fuel operations remain exposed to the gap between international product prices and government-influenced pump rates.
Refining margins surge
IOC credited its record result to better refining margins and strong contributions from its petrochemical and gas businesses. Crude oil prices dipped temporarily between mid-June and mid-August. That lowered feedstock costs and produced an inventory gain of about Rs 7,000 crore.
The strong refining environment also showed up at BPCL and HPCL. HPCL earned a gross refining margin of USD 32.15 a barrel in the September quarter, against USD 8.80 a year earlier. BPCL’s margin rose to USD 32.53 a barrel from USD 10.78.
A rough first quarter
The results follow a difficult April-June period. The three companies took heavy losses as crude prices climbed above USD 100 a barrel amid the West Asia conflict, and retail prices were slow to adjust.
Better refining economics and lower crude prices for part of the September quarter restored profitability, though the recovery was uneven. Oil prices eased in the second quarter but firmed up again in October, industry sources said.
Caution on coming quarters
IOC warned in its earnings statement that profits in the coming quarters could take a hit. It said inventory losses could arise if crude prices fall as the situation in the Middle East normalises.
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