Anuj, I appreciate the color on capex. Just a broad breakup, maybe percentage-wise in terms of the key heads like refining marketing petchem over the next 3 years. That will help. And if you have any number in mind at an aggregate level, even that will be very helpful?
I will be able to share my next year's capex. Next year, I'm going to spend almost INR32,700 crores in the financial year 26-27. And I can also share that these expenses, the broad bifurcation should be majorly in refining and existing pipeline setup. And major expenses are going to this segment and maybe INR5,000 crores will be going to the renewable segment out of that.
What's the thought process you're seeing today on pricing? Because we are a very high-volume company and you have recoveries today like the way we have is obviously very alarming for us as investors. So can we now think on the grounds that we could go back to the daily pricing regime, which was existing in the past? And are we looking to get pricing aligned to market prices in the very near term?
See, Sumeet, you have already stated that today, the priority is to ensure the energy security to our citizens. And Indian Oil remains one of the company which has that responsibility, and we are trying our best to fulfill that. As we have stated in the beginning, we are trying to manage our entire supply chain and realign that in the most optimum way. Because of these disruptions, we have diversified our crude sourcing, LPG sourcing countries. We have changed our refinery diet. Now as far as the how to mitigate the situation is concerned, situation is very uncertain and unstable. We are working on a day-to-day basis to manage that crisis and the right decisions are being taken at appropriate levels to ensure that both energy security and the company's viability remains. As far as specific numbers are concerned, we have stated that we will not be able to give some specific forward-looking guidance as of now as we are in the midst of a quarter, which is going on, still we are on 19th of May. Things change every day.
Can you talk about a bit around what were your refining margins or whatever margins you want to kind of give us and to get a perspective to reflect on a quarter-on-quarter basis, how things have moved. And also, if you can just highlight how much was the impact in the month of March because of the situation that evolved around the conflict?
See, if you have seen our results, we have given a very categorically statement there for the benefit of our investors that in the end of February '26, conflict arose in Middle East region, leading to supply uncertainties and result in volatility in the price of crude oil and petroleum products in the international market. The profitability for the year 25-26 was largely insulated from the impact of these developments due to inventory procured at normal prices before the conflict. So 25-26 results have not got impacted to a major extent. Now coming to your first question of the refining margins. See, refining margins have been quite volatile and unstable during the particularly this quarter. But what we felt that Indian Oil is an integrated energy company and gross refining margins reflect only the performance of refinery segment. Therefore, using GRM alone as a benchmark of overall performance may not give the correct picture to our investors. And now we are focusing that let us focus on EBITDA and PAT to see the overall performance of the company. So that way, we have not disclosed our GRMs during this quarter in our financial results.
As you mentioned that the GRM we are not disclosing, it is just for the quarter or going forward, this will be the policy? How is it?
See, till the time so much unstability and volatility remains, I think giving GRM would not be a correct way of disclosing our financial statements because at one point of time, you may find GRM is excessively high, which doesn't get reflected in my profitability. So till that time, we are making it a pause. But, we may consider once again once the situation normalizes.
Regarding the refining margins, so do you think that the world is entering a refining super cycle and GRMs will average at a much higher level than what we have observed the number before the war. So what is your view on the GRM going forward, maybe for FY '27-'28?
See, although I have said again and again that I will refrain from forward-looking statement, but yes, I can share that world is, definitely will be facing some cycles of higher refining margins going forward because whatever has happened, whether in Russia, Ukraine or in U.S., Iran, it has disrupted the refining and upstream assets also. So all in all, because of the various uncertainties, refining margins are expected to remain on the higher side until this geopolitical situation normalizes. And if you see for the past 5 years itself, refining margins have been quite high. So yes, refining margins are expected to remain high in next 1 or 2 years because of these uncertainties.
If you look at your Petroleum segment results, can you share what is the impact of the inventory accounting included in this petroleum segment result for the fourth quarter?
Actually, because of various factors, I would say that '25-'26 as a whole year was a very stable year for us. And as specific inventory numbers are concerned, I would like to refrain from the specific numbers as on date. But if you want, you can get in touch with my corporate finance team to help you out on this.
On the petrochemical segment and the gas segment, can you share some thoughts on what are the drivers for the petrochemical turnaround? Is it due to inventory gains? Or is there a sustainable improvement in the spread? And on the gas segment, what has resulted in the loss?
See, I have shared that we had the highest petrochemical sales during the year financial year '25-'26. And if you see the fourth quarter was very good for the petrochemical segment. So that was the additional margins what we earned in the Q4 in petchem. But as far as gas is concerned, gas prices remained on elevated levels and that has impacted the quantity of sales and to the margins to some extent. As far as petrochemicals are concerned, we expect to continue have a higher sales volume and also give reasonable good returns from this business segment.
And sir, with vessel acquisitions happening at peak of the cycles, what minimum benchmarks or ROCE is targeted by this JV? And sir, will that JV be a nodal agency going forward for the oil PSUs or it will be still on competitive basis for other players as well?
Today, I will not be able to give you the exact numbers, but these issues are being discussed between the companies and the SCI. Due diligence is going on as on date, I can say. All these things are under discussion as on date.
Just following up to the earlier participant's question, how will we ensure, sir, in this shipping business because it's a very cyclical business. So how will we ensure profitability of the JV because there are up cycle, there are abnormally high rate cycles, and it's a very long capex-intensive business. So how will we ensure that there are no losses in the JV?
As I said, all these issues are under deliberation. But I can just share with you that Indian Oil is an end user of the shipping business what we are talking about. And we are in a continuous business for the past more than 5 to 6 decades, and this is going to continue. So any arrangement which gives me the shipping security will be beneficial to the company and which is very much evident in the past 2 years that whichever company had a very strong shipping connection, it made best use of that during this crisis.
Sir, at present, what is the estimated annual spend by us on shipping freight charges? And what percentage we are expecting that it will go through the proposed JV? And it will be primarily a very long-term arrangement, 5, 10, 15 years? What is the expected time line, sir? When are we expecting this to be operationalized?
I will tell the Corporate Finance team to give it to you through the coordinator, please. I don't have the ready numbers with me. Yes, yes. It is going to be a long-term joint venture company because the shipping business has a long gestation period. Things are under discussion and the due diligence is going on. So we are quite focused on this joint venture company.
So, FY29 should be the number, should be the time when we should have more or less, hopefully, given that these are Brownfield more or less...
I can't give a specific year, but I would definitely say that being a Brownfield expansion, we expect them to come on board very quickly.
Sir, I know you can't I agree with your statement on pricing. What I was trying to understand is, is my assumption correct when we say that if the price of crude has moved up by $50 or double, then probably for us to be able to make a decent margin, the price at the pump should also go up by that same quantum? Or is there a lot more calculation which goes within it?
See, it depends upon a number of the factors. prevailing in the country, outside the country. And as I said many number of times, we will not be able to give any specific guidance on this matter.
First question is on Project SPRINT. Now that you have completed 1 year of this project, what is the progress that you have to share on this both on the capex and the opex front? The second one is on the capex priorities beyond the current expansion phase - how should one think about the capex allocation for the next 3 years?
I will take the first question. As we have shared in the opening remarks, that the company has achieved the highest level sales in all the physical parameters, whether it is refining, whether it is marketing. So I think the SPRINT has given us the good outcomes, which is noticed in our results also. As far as the capex and opex is concerned, I would like to share that on overall basis, we have achieved measurable savings of approximately INR2,200 crores during financial year 25-26 on account of Project SPRINT. This INR2,200 crores were saved on account of various initiatives like the reduction in repairs and maintenance expenditure, our energy efficiency parameters and supply chain optimization. So many factors contributed to almost INR2,200 crores. And for next year 26-27, we are targeting savings of INR2,500 crores from this initiative. Now coming to your second question, which was on the capex allocation going forward. Indian Oil is a very, very diversified company. We do investments in our refining, marketing, petrochemical, gas, renewables.
So, you are saying that the other expenses line item is where the take-out of the INR2,200 crores is likely to have happened, right? Is that understanding correct?
Yes. To a major extent, yes. But Some initiatives are in the nature of energy efficiency, which are not exactly coming in other expenses. It comes part of my operating margins. So everything, I would say 50-50 would be coming in my other expenses or you would say, revenue expenditure side. And another INR1,000 crores would be coming in my margin side.
My first question was more related to the plans that you talked about around refining expansion. Can you just give us a bit of an idea around where what is the status now for all the 3 refineries, where is the ramp-up stages? And can we expect full utilization rate of the 3 refineries by end of this year?
Yes. See, Panipat refinery, which is being expanded from 15 million metric tons to 25 MMTPA. See, the approved cost is around INR38,000 crores. And out of that, we have already spent approximately INR27,000 crores as on date. And we expect our completion to happen in December '26. The second one, Gujarat refinery, which is being expanded from 13.7 MMTPA to 18 MMTPA, the total cost expected cost is INR19,000 crores, and we have already spent INR13,500 crores as on date. And we also expect this to come in the similar timeframe in November, December. And Barauni also, which is expected to we are expanding from 6 MMTP to 9 MMTPA. Our approved cost is INR18,000 crores. And out of that, we have already spent INR13,000. And this is also expected to come near the same timeframe. So you are correct to say that all the 3 refineries expansions are coming within the same time.
And sir, when we talk about commissioning, we are basically saying that is when you will get your first crude in and then you kind of ramp up from there? Or is it like a ramp-up state we are talking about? About a year of stabilization from there?
No it's the first crude in we take, and we start our operations on that date. And over the time. Generally, we say 60% capacity should come in the first year and 80% next year and 100% in the third year.
In terms of the capex, the last question I had was like you are still maintaining your guidance for spending around 50% of fiscal '27 capex on refining. Considering these 3 projects are kind of done, is there anything specific that this money would be spent on? So we should be seeing lower capex is on refining starting fiscal '28 is what you're kind of towards.
See, whenever the commissioning happens, the payments take some time. So there's a difference between the commissioning and physical progress and the payment cycles. So that is why there would be a substantial cash outgo on account of these completed projects in this financial year. Yes.
And sir, may I know how is the LPG under recovery in April and May? And also, can you just highlight there has been a substantial increase in the operating cost. So if you can just help us the breakup or where the incremental cost has been there?
See, the under recovery per cylinder was INR100 in the quarter 4 of financial year '25-'26, which went high to INR171 in April 2026, which has further increased to INR670 in May 2026. LPG buffer position as on 31st March '26 is INR23,102 crores. I would also like to share that LPG loss incurred during quarter 4 '25-'26 is INR2,405 crores. And for full financial year '25-'26 is INR9,211 which is without registering any subsidy, which is being received by the company. But I can always share that the exchange loss was a major factor of this increase in the other expenses. As you know that the rupee depreciated by almost 9% 11% during this financial year '25-'26. So the exchange losses have been the major contributor in the other expenses.
After the increase in capacity for refining, will IOCL have surplus petrol and diesel production compared to the marketing volume? And what will be you will be exporting these volumes or selling to, say, other OMCs?
See, the kind of demand we are seeing in India, we feel that we may not have major exportable surplus on a sustained basis from our refining systems. But from season to season because India also faces a seasonal demand in the monsoon period, in the winters, in the summers. So from the seasonal point of view, yes, we would be exporting. But on a sustained basis, we don't anticipate major exports coming, except for a few products like maybe naphtha for some point of time or furnace oil, but not to a major extent, we see any exportable surplus.
The refinery throughput for FY27, shall we assume it will be higher than FY '26 because the utilization has been around 108%? So what should we think about throughput for the refinery?
See, I would not like to comment on the additional capacities, which will come on account of expansions. But from an existing refining setup, I expect similar refining throughput next year also because if you see this year has been one of the highest throughput. And current year, we are having a few shutdowns, planned shutdowns. So and a few shutdowns, which were planned this year will come back next year. So we are expecting that next year, we should be having almost 75 MMTPA of refining throughput on a standalone basis. If you add CPCL, that will be another 10. From Indian Oil, we would be having 75 MMTPA of refining throughput.
Just one more follow-up question on the gas segment. So in terms of the progress on the standalone city gas distribution network, what is the kind of ramp-up you expect this year? And when do you see the CGD business turning profitable?
See, as far as CGD business is concerned, we are having an EBITDA positive in '25-'26 Q1 itself, and we have become PBT positive by the end of the financial year '25-'26. So as far as CGD business is concerned, it is now a net positive contributor in my P&L. And going forward, we expect our volumes to go up in next financial year from this segment as well.
In terms of the gas supply chain for the CGD business, apart from the new oil gas and the APM gas, are you able to source enough LNG for the kind of ramp-up of plans for the stand-alone CGDs? And how are you managing the supply chain for the natural gas there for the CGD business?
See, there is no constraints in the availability of gas as such. It is only the pricing issues actually. So it's more of a decision whether you will be able to pass on this higher gas to your customers or your internal system. So based on various factors, the CGD business is going up, volumes are going up, and I've shown to you that it is a PBT positive for me now from '25-'26, Q4 onwards. I will also share with you that we have many of the suppliers declared force majeure due to closure of Strait of Hormuz. So that affected our business, but we also diversified our spot procurement from Indonesia, Nigeria, Angola, Oman. So we have now diversified our import sources also. All in all, I will just say that it's a pricing issue, not a supply constraint.
Sir, my question is around the proposed JV between SCI and oil PSUs. So in light of the current energy security concerns, when this JV is expected to be finalized and operational, sir?
See, under the aegis of MOPNG and Minister of Shipping, a nonbinding MOU was signed between the Oil CPSEs and Shipping Corporation of India for formulation of a joint venture company for ownership and maintenance of vessels with focus that some of them should be built in India. Indian Oil is exploring to purchase 4 MR vessels to start with. It is established that the CPSEs have complementary capabilities and jointly acquire and manage the operation of vessels and thereby exercise better control on the petroleum supply chain. The companies, whether it is both Oil PSUs and SCI have agreed in principle to work together and collaborate on acquisition and operation of vessels on mutually beneficiary basis.
Anuj ji, if you could also give a sense of the ramp-up of these reasonably large capacities which are coming in the sense of not just throughput, but also the upgrader units by when do you think they will get to full utilization? Should we assume that everything to get at full utilization will be 3, 4 quarters from the time they start, so maybe more like towards the end of 2027 is when all of these units will be fully stabilized?
Actually, as you know that Indian Oil is already managing 10 refineries, have handled refinery expansions in the past. As a thumb rule in our company, we say the first year, we will achieve 60%. Next year, 80% minimum. And by the third year, we achieved 100%. Percentages can go a little bit here and there. But on a broad basis, this is what we have seen in the past. And this is how we make our profitability metrics also when we take management approvals on any expansion. And all these are Brownfield expansions, and they're expected to take a lesser turnaround time. So this 60, 80, 100 is on the outer scale, we expect it to turn around much faster.
I have only one question. I heard previously that you were saying that the pricing is an issue on the gas side, not the supply. Does it apply to the supply of petroleum products as well? And till what time are we confident about this situation? So we are like 30 days, 40 days, 50 days of stock with us? Or is there some point where we might actually not be able to supply the petrol diesel at the pumps?
I will reply to your first question first. See, as far as the supply of crude oil and other petroleum products are concerned, we have consistently seen that particularly crude oil, there are very diversified sources are available and all our refineries are operating on a full capacity since the crisis have started. So, we are making sure the crude oil is available. Yes, LPG had a constraint, but we have managed to diversify our sources of LPG and reasonable good quantity of LPG has been made available. Now coming to your second question about the inventory levels, we don't have any shortage of either crude oil and LPG. But yes, crude oil number of days inventory is still being maintained for over a month. LPG inventory has come down, but still it is being managed so that we have enough LPG availability PAN-India basis.