Petrol losses still at Rs 10-14/litre; break-even requires crude at $85: BPCL CMD

The comments indicate that the recent retail fuel price hikes have only partially eased pressure on OMC balance sheets, with global energy disruptions linked to the Strait of Hormuz continuing to inflate the landed cost of crude and LPG imports.

“Diesel… some days it is ₹25, some days ₹30 or ₹32. Petrol is still around ₹10-14 per litre, though it changes every day,” Khanna, who also holds additional charge of Director (Refineries), told Financial Express.

BPCL Director (Finance) VRK Gupta said the company has planned capital expenditure of around ₹22,000-25,000 crore for FY27, with major allocations earmarked for the Bina Petrochemical Complex, polypropylene projects, exploration activities, CGD expansion and retail infrastructure.

Khanna said crude benchmark prices alone no longer reflect the actual burden on refiners and fuel retailers as freight charges, insurance premiums and official selling prices (OSPs) have increased sharply after the conflict. “Earlier, freight rates from the Persian Gulf to India were around $2-3. Today it is almost $10. Insurance costs have gone up. Saudi OSP premiums are around $18,” he said.

According to BPCL, OMC under-recoveries could substantially narrow and approach break-even levels if crude prices cool towards $85 per barrel and freight and insurance conditions normalise.

“If everything comes back to normal and crude reaches around the $85 level, then we can say we reach break-even,” Khanna said.

The company said it has increased crude inventories beyond normal operating levels to ensure uninterrupted refinery operations amid geopolitical uncertainty and shipping disruptions.

“Generally, we keep around 25-27 days of crude inventory, but due to the situation we are keeping slightly higher inventory, around 27-30 days,” Khanna said.

He added that BPCL has already tied up most of its June and July crude procurement requirements in advance from diversified sources including the Middle East, Russia, the US and Venezuela to ensure uninterrupted supply continuity.

On LPG, Khanna said the company has intensified sourcing efforts and increased refinery LPG production to reduce import dependence amid tight global spot availability and elevated international premiums.

“LPG procurement is more difficult compared to crude because most cargoes are tied under long-term contracts. Still, we are sourcing LPG even from the US on a spot basis,” he said.

BPCL is also sending empty LPG vessels to the US despite round-trip voyage periods stretching to nearly 90 days to maintain domestic LPG availability.

Khanna said LPG under-recoveries remain elevated at around ₹600-700 per cylinder because of sharply higher international premiums and freight costs. “If you ask me, sometimes LPG coverage is 10 days, sometimes 20 days. It depends on vessel arrivals,” he said, while maintaining that the company has managed domestic LPG supplies “without any major hurdles.”

BPCL Director (Marketing) Subhankar Sen said the company has intensified vigilance across retail fuel stations after bulk diesel consumers increasingly shifted towards subsidised retail outlets because of widening price differences between retail and bulk fuel sales. “There is a lot of vigilance in the network now to ensure retail outlets cater only to retail customers. Bulk customers are being discouraged,” Sen said. He added that BPCL has already achieved around 7% compressed biogas (CBG) blending against the mandated target of 1%, supported by rising availability of CBG plants across regions.

“We have achieved 7%, although the mandate is only 1%,” he said, adding that blending levels are expected to rise further as more CBG plants become operational near BPCL’s distribution network.