How India Inc Paid Three Different Bills For The Same Barrel Of Crude

By Dev Chandrasekhar

Crude oil and Brent-linked gas prices climbed through the first quarter of FY27, on the back of disruptions running through West Asia this year.

Three sectors in India were affected by that shock the most this quarter — oil marketing, logistics and fertiliser. Each one runs on a different mechanism for handling a crude spike; that mechanism decided how the quarter's numbers came out, not the quality of any individual company's management.

Oil marketing companies took the price rise straight onto their retail books and clawed back only part of it through refining profit. Logistics companies passed the increase on to customers by contract, losing at most a few weeks of cash flow to the lag. 

Fertiliser companies split down the middle. Urea stayed protected; everything else got squeezed, depending on which subsidy bucket a company's product falls into.

The OMCs: Marketing Bleeds, Refining Covers

Bharat Petroleum, Indian Oil and Hindustan Petroleum, the three state-run retailers that control roughly nine-tenths of the country's pump sales, buy crude, refine it, and sell diesel and petrol at pumps where the retail price does not move as fast as the input cost.

Retail fuel prices in India are regulated by convention even though formally deregulated years ago. Governments led by both the Congress-led UPA and the BJP-led NDA have leaned on OMCs to hold the pump price steady through politically sensitive stretches.

That is what happened this quarter, and that is why the loss fell on the marketing side of the business rather than on crude procurement.

When crude and product prices spiked through Q1 FY27, all three OMCs reported the same official line: suppressed marketing margins, offset partly by stronger refining margins.

BPCL's July 23 results call filled in what that means in practice. Elevated international product prices pushed marketing into losses.

The company raised retail prices by roughly Rs 7.5 a litre across petrol and diesel, which clawed back some of the damage late in the quarter.

BPCL management pushed back on reading the marketing loss in isolation: refining cracks, the spread between crude cost and refined product price, were unusually wide this quarter.

The company's net gross refining margin, or GRM, the profit booked per barrel refined, came in near $17 a barrel against a gross $41.41 before adjustments.

Viewed only through the marketing line, BPCL under-recovered, posting a standalone net loss of Rs 3,962 crore for the quarter. Viewed as one business, refining profit covered most of the retail loss.

IOC's most recent commentary predates the quarter, from its Q4 FY26 call on May 19, and even then management flagged the same split: refining margins volatile and at points extraordinarily high, marketing margins broadly intact.

IOC's Q1 FY27 numbers showed that pattern playing out. Net loss was Rs 2,661 crore, the Indian Crude Basket was up 21% quarter-on-quarter to $100.74 a barrel, and management pointed to retail fuel margins and LPG under-recoveries as the drag even as refining and pipeline throughput hit records.

HPCL offered no management commentary for the quarter. What surfaced came from analyst notes citing its numbers. It posted an EBITDA loss of Rs 16,100 crore and a net loss of Rs 11,500 crore, with a robust GRM of $23.8 a barrel set against marketing losses of Rs 25.2 a litre on diesel and Rs 7.7 on petrol.

Two of three OMCs explained the trade-off in their own words, in front of analysts who could push back. The third let its numbers do the talking, which is the less forgiving version of this story.

How did it affect the logistics and fertilisers sector?

Granola Runs Revenue On Attio

"When I think of revenue, I think of Attio." - Shreman Shrestha, Head of Business at Granola

Here's what that adds up to:

• Zero missed leads and 10x faster access to customer context

• Lead triage 83% faster

• Five hours saved per week with automated updates

Start Your Trial

54.1

That's where India's services PMI landed in August, up from 53.3 in July, according to HSBC's India Services Purchasing Managers' Index compiled by S&P Global.

While the reading signals expansion, any number above 50 points to growth, it came in below a preliminary estimate of 54.5 and fractionally under its long-run average, keeping overall activity near its weakest in more than four years.

Fast Facts: New business, the survey's primary demand indicator, grew at the second-slowest pace in over four years. International demand offered little support, with new export orders expanding at a broadly similar rate to July.

Cost pressures ticked up modestly, with prices charged to clients rising at the fastest pace since March as firms passed on higher operating expenses.

Forecast: The one bright spot was hiring. Services firms took on staff at the fastest rate in 15 months, suggesting some confidence remains despite subdued demand.

India's Composite PMI, combining services and manufacturing, held flat at 54.3, with a quicker services expansion needed to offset manufacturing growth slipping to a five-year low.

Canada Flags India Food Fraud

The Canadian Food Inspection Agency (CFIA) is monitoring an illegal food operation busted in Mumbai last week to determine whether it poses any risk to Canadian imports, Reuters reported.

It is the first foreign agency to react to the incident.

Context: Indian authorities raided a Mumbai warehouse, seizing products worth nearly $80,000 along with chemicals and printing machines used to replace expiry dates and nutritional information on PepsiCo, Nestle, Coca-Cola and Unilever products to make them suitable for export.

The companies have not been accused of any wrongdoing; the investigation is focused on rogue exporters.

A packet of PepsiCo's Kurkure chips found inside the warehouse carried a fake label with nutrition information in English and French, matching Canada's bilingual labelling requirements.

Forecast: The CFIA said it has no information indicating products from the operation entered Canada, but added it takes food fraud, including false date markings and inaccurate nutrition information, seriously.

Maharashtra FDA Commissioner Tukaram Mundhe, who led the raid, told Reuters that authorities have written to concerned agencies about their findings.

Boeing Fined For Safety Violations

Boeing has paid a $3.1 million fine to the US Federal Aviation Administration (FAA) over widespread safety violations, including issues linked to the 2024 Alaska Airlines 737 MAX 9 emergency. The FAA said it found hundreds of quality-control violations at Boeing’s 737 factory in Washington and at supplier Spirit AeroSystems’ facility in Kansas between September 2023 and February 2024.

The Shift: It also found that Boeing employees interfered with safety officials and, in one case, pressured an employee to approve an aircraft that did not meet standards. Boeing paid the fine in January, but the payment was disclosed only this week.

Backdrop: The findings come amid heightened scrutiny of Boeing in India after an Air India Boeing 787-8 crashed shortly after take-off from Ahmedabad on June 12, 2025, killing 260 people. India’s Aircraft Accident Investigation Bureau is still investigating the crash. Indian airlines operate several Boeing 737s, 777s and 787s, making the manufacturer’s safety and quality-control systems relevant to a growing Indian aviation market.

More EV Curbs Ahead!

Government officials have urged India's automakers to move faster on electric vehicles (EVs), especially trucks and buses. At an industry event on Thursday, PMO advisor Tarun Kapoor said two-wheeler EVs are progressing fine, though manufacturers said they earn less on electric models and prefer selling more conventional ones. "But then how to make profit is up to you," he said.

"On the four-wheeler side, I can tell you that more and more restrictions will come," he warned. Kapoor was especially firm on trucks and buses, calling diesel a major bottleneck.

Catch Up Quick: Ministry of Heavy Industries Secretary Kamran Rizvi criticised the slow rollout of charging infrastructure, saying the industry "needs to get its act together on charging.” Road Transport Secretary V Umashankar flagged that the changing fuel mix is becoming a growing concern.

Setup: Shailesh Chandra, president of the Society of Indian Automobile Manufacturers, noted that the industry is working closely with the government on this transition, with EV sales growing nearly 25% in FY26.

Drive Less, Save More

G20 countries could save about $90 billion a year in oil costs by 2050 by changing how people travel, the Council on Energy, Environment and Water (CEEW) found in a recent study. Greater carpooling, bus use and hybrid work could cut annual passenger-transport emissions by 408–538 million tonnes of CO₂ by 2050.

Impact: CEEW estimates that these behavioural changes could save the G20 around 2.715 billion tonnes of oil between 2025 and 2050, equivalent to about 59% of global oil demand in 2024. The shift could also provide a buffer against oil-supply shocks linked to geopolitical conflicts. Previously, The Signal Brief covered carpooling too and why it hasn’t taken off in India. 

The Shift: Carpooling offers the largest emissions-reduction potential, cutting 237-411 million tonnes of CO₂ annually by 2050. Developed economies and China could account for 80-88% of the combined savings, as they have higher car ownership and longer travel distances. The US and EU-15 alone could contribute 61-63% of the total savings.

Find the perfect marketing agency, for free.

Stop writing RFPs. Tell us your budget and needs, and our experts send back 3 or 4 agencies worth pitching. The no cost way to source the best agency, without lifting a fingers

Get Matched Free

Indian Markets Reel Under Oil Price Onslaught

On Episode 968 of The Core Report, financial journalist Govindraj Ethiraj talks to Arvind Chari, Chief Investment Strategist at Q India UK (affiliate of Quantum Advisors India) as well as Piyush Pandey, Senior Vice President, Institutional  Equity Research (Lead Analyst)-IT, Telecom, Internet and Power at Centrum India.

• Indian Markets Reel Under Oil Price Onslaught

• Rupee Hits A 10-Week Closing High

• India’s Banking System Will See A Liquidity Overdose Thanks To The $127 Billion Inflows

• ITC Infotech Is Merging With Ashok Soota’s Happiest Minds. What Signals For India’s IT Sector?