The refiner, however, refrained from providing earnings guidance due to continued volatility in global energy markets.Hindustan Petroleum Corporation Limited (HPCL) on Wednesday warned of losses in Q1 FY27 as the ongoing West Asia crisis drives up crude prices and compresses fuel margins.
“Quarter one we expect it to be very tough. The crudes are very expensive, product prices are low, and everything is quite volatilised. As of where we stand, there will be losses in the first quarter,” the company’s management said during its post-results analyst call.
The commentary comes even as the state-run refiner delivered a strong Q4 performance through supply diversification, inventory lag benefits, and tight financial controls.
The refiner, however, refrained from providing earnings guidance due to continued volatility in global energy markets.
HPCL said the sharp deterioration in market conditions emerged only in March, after the company had already posted strong momentum in January and February.
The company added that its business operates on a lag effect, meaning much of the crude processed during March had been procured earlier at lower prices, helping cushion the immediate financial impact of the crisis.
HPCL’s standalone Q4 FY26 PAT rose to ₹4,901 crore, while full-year standalone PAT climbed to ₹17,175 crore, up 133 per cent year-on-year and above HPCL’s previous record annual profit.
Diversified sourcing post war outbreak
The company said crude sourcing patterns changed significantly following disruptions in the Persian Gulf region.
Before the crisis, HPCL relied heavily on long-term contracts with Gulf suppliers, such as Iraq. However, as regional supply chains tightened, the company increased spot cargo purchases and diversified sourcing across Russia, Africa, the US and even Venezuela.
“Russian crude came strongly into the picture,” the management said, adding that Iraqi crude purchases had “gone down considerably” because supplies from the Persian Gulf were disrupted.
HPCL said it maintained roughly two months of secured crude coverage throughout the crisis period, broadly in line with normal operating practice, except for a brief period during the initial days of the disruption in March.
LPG sourcing also underwent a major shift during the crisis, with the company increasingly relying on spot cargoes instead of traditional Middle East term contracts.
The company said panic buying and fears of shortages added to operational stress, but coordinated action among oil marketing companies and the Petroleum Ministry helped maintain uninterrupted retail fuel and LPG supplies across the country.
Mounting under-recoveries
India’s state-run oil marketing companies are currently facing losses of around ₹1,000 crore per day, with cumulative under-recoveries estimated at nearly ₹1.98 lakh crore, per industry estimates.
The quarterly loss for the sector could rise to ₹1 lakh crore-₹1.2 lakh crore if crude prices remain elevated.
Union Petroleum Minister Hardeep Singh Puri on Tuesday said the government was aware of the stress on oil marketing companies and would have to assess how long firms could continue absorbing losses while shielding consumers from higher fuel prices.
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