HPCL and BPCL have suffered a loss of thousands of crores of rupees in the first quarter of the financial year 2026-27. Know why despite the rising prices of crude oil, not increasing the prices of petrol and diesel and refinery business, both the government oil companies suffered losses.
The country’s state oil companies Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) have suffered a huge financial setback in the first quarter (April-June) of the financial year 2026-27. Both the companies reached net losses of thousands of crores of rupees. The main reason for this was the sharp rise in the prices of crude oil in the international market and selling of petrol, diesel and LPG at prices below cost for a long time. Although earnings from the refining business were better, losses in fuel sales wiped out the entire profit.
Big change in the results of HPCL and BPCL
HPCL reported a net loss of Rs 12,265 crore in the April-June quarter. In the same period last year, the company had made a net profit of Rs 4,111 crore. At the same time, on the basis of core operating business, the company suffered a loss of Rs 11,526 crore, whereas a profit was recorded in the same period a year ago.
On the other hand, BPCL also suffered a net loss of Rs 3,962 crore in the first quarter. This is the first loss for the company after 15 consecutive quarters. Last year, the company had earned a profit of Rs 6,124 crore in the April-June quarter. Interestingly, both the companies recorded growth in total income. HPCL’s income increased to Rs 1.45 lakh crore and BPCL’s income reached Rs 1.59 lakh crore. That means sales increased, but profits could not be saved because costs increased much faster.
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Inflation of crude oil became the biggest reason for the loss.
According to experts, after increased geopolitical tension in West Asia and developments related to Iran, crude oil prices in the international market jumped by more than 50 percent. Generally, when the price of crude oil increases, the prices of petrol and diesel are also increased, but the government oil companies did not change the retail prices of the fuel for about two and a half months. Due to this, companies had to sell fuel below cost, which had a direct impact on their earnings.
What will be the impact going forward?
Later in the second half of May, petrol and diesel prices were increased by more than Rs 7.50 per liter and domestic LPG cylinders also became costlier. However, by then the companies had suffered huge financial losses.
Analysts believe that if crude oil prices remain stable in the international market and domestic fuel pricing remains normal, then the financial condition of state-owned oil companies may see improvement in the coming quarters. For now, Q1 results have made it clear that growing sales do not always guarantee profits, especially when costs and market conditions are rapidly changing.
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