New Delhi: Despite importing much less Russian oil than earlier, India’s major state-run oil refiners had massive profits in Q2. Combined earnings of such companies as Indian Oil, BPCL, and HPCL jump massively; their year-on-year profits soar 457%, which is big. The reason? Global oil market conditions were more favorable for them than just cheap Russian crude.
This was because the cost of producing fuel declined due to international crude prices falling, while demand for refined products remained strong and the refining margin (the “crack”) expanded considerably. For instance, diesel cracks-a kind of refining margin-soared, along with margins for both petrol and jet fuel. All of these boosted the earnings for the refiners.
Even though these companies are importing less Russian crude, because of sanctions and other geopolitical issues, they do not suffer much. They are replacing that crude with other sources like West Asia or the U.S., and still making good money. Analysts say it is the global price divides that really matter to refiners: how much they pay for crude versus how much they earn after refining.
