Petrol, diesel margins may jump in Q2FY27, but LPG losses to cap OMC gains: Report
India’s oil marketing companies (OMCs) are projected to experience a significant recovery in petrol and diesel margins in Q2FY27, driven by global supply disruptions. However, persistent losses from LPG sales are expected to cap overall gains, keeping effective margins below historical averages.
Why it matters
This forecast impacts the financial performance of major Indian oil companies, potentially influencing fuel pricing for consumers and government subsidy policies on LPG, thereby affecting the broader Indian economy and energy sector.
India’s oil marketing companies (OMCs) could see a sharp recovery in petrol and diesel margins in the second quarter of FY27, although continued losses on LPG sales are likely to limit the overall benefit, according to a report by JM Financial Institutional Securities.The brokerage expects the combined refining and marketing margin on petrol and diesel to rise to Rs 11.4 per litre in Q2FY27, from Rs 2.4 per litre in the previous quarter.However, after accounting for LPG losses, the effective margin is expected to be lower at Rs 8.5 per litre.JM Financial said the combined petrol and diesel margin could still remain around Rs 1 per litre below its historical average of Rs 12.5 per litre.LPG losses remain a drag on marginsThe brokerage estimates that OMCs could incur LPG losses of around Rs 11,000 crore in Q2FY27, although this would be lower than the Rs 21,200 crore estimated for the…
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