New Delhi: Indian Oil Corporation Ltd (IOC), the country’s largest oil refiner, has increased the share of Russian crude in its refining mix to 24% in the April–June quarter of FY2025-26, up from 22% in the previous fiscal year. The move reflects IOC’s strategic diversification of crude sourcing amid a dynamic global energy landscape.
Russian Crude Still Attractive Despite Lower Discounts
At the company’s Q1 post-results conference call, Anuj Jain, Director (Finance), revealed that Russian oil continues to play a key role in IOC’s procurement strategy.
“We processed 22% Russian crude in FY25, which has increased to 24% in Q1. Discounts have moderated but remain around USD 1.50 per barrel to the Dubai benchmark,” Jain said.
Since the West imposed sanctions on Russia following the Ukraine conflict, Indian refiners have ramped up imports from Moscow, leveraging favorable pricing. However, the discount margins have narrowed compared to the immediate aftermath of the war.
LPG Under-Recoveries Drop; Compensation Awaited
IOC also reported improvement in the LPG segment, where under-recoveries have narrowed.
“In Q1 FY26, LPG under-recovery was Rs 160–165 per cylinder, which has now come down to Rs 100–105,” Jain noted.
The central government has approved Rs 30,000 crore in compensation for losses incurred by oil marketing companies (OMCs) on LPG sales. While the approval has been granted, Jain said the disbursement modalities are still awaited.
Demand Outlook Robust; Capacity Expansions on Track
Nitin Kumar, CGM, Corporate Finance, cited a projected 4.65% growth in domestic petroleum product consumption in FY26, according to the Petroleum Planning and Analysis Cell (PPAC).
“This reinforces India’s growing role in global oil demand. IOC is committed to energy access at affordable costs,” he stated.
Kumar confirmed that three major refinery expansion projects — Panipat, Gujarat, and Barauni — are on schedule for completion by 2026. These will raise IOC’s refining capacity from 80.8 MTPA to 98 MTPA, enabling it to meet the increasing energy demand and support India’s energy self-sufficiency goals.
Petrochemicals, Green Energy Gain Focus
IOC is targeting significant investments in petrochemicals, aiming to increase integration levels from 6% to 15% by 2030.
Simultaneously, the company is accelerating its clean energy ambitions–
- Expansion of EV charging and battery swapping infrastructure
- Investment in natural gas, compressed biogas, biofuels
- Active development of green hydrogen projects, including hydrogen mobility
“We are gradually shifting capex from conventional to alternative energy and petrochemicals,” said Kumar.
For FY26, IOC has budgeted Rs 34,000 crore in capital expenditure, with major allocations for refining, pipelines, petrochemicals, city gas distribution, and renewable energy.
