State-run Bharat Petroleum Corporation is set to invest a substantial Rs 25,000 crore in capital expenditure for FY27, primarily targeting expansion projects, while also acknowledging that the recent Rs 4-per-litre fuel price hike has offered some financial relief amidst volatile crude oil markets.
Key Points
- BPCL plans a capital expenditure of Rs 25,000 crore for FY27, focusing on ongoing expansion projects, an increase from Rs 20,400 crore in the previous year.
- The recent Rs 4-per-litre hike in retail petrol and diesel prices has provided some financial 'respite' to BPCL, easing the burden from soaring crude oil prices.
- BPCL has delayed regular refinery maintenance to September from April to ensure uninterrupted fuel supply and meet the country's demand.
- The company reported a 28 per cent year-on-year increase in consolidated net profit to Rs 5,624 crore in Q4 FY26, despite a sequential drop due to foreign exchange and impairment losses.
- BPCL is working on a greenfield refinery in Andhra Pradesh and expects to finalise its detailed feasibility report by June to determine investment requirements.
State-run Bharat Petroleum Corporation Ltd (BPCL) plans capital expenditure of Rs 25,000 crore for the financial year 2026-27 (FY27), focused primarily on ongoing expansion projects, against spending of Rs 20,400 crore in the previous year, the company"s management told Business Standard in an interview.
Impact of Fuel Price Adjustments
BPCL refrained from commenting on expectations of a further increase in retail prices of petrol and diesel but said the recent Rs 4-per-litre price hike has somewhat helped ease the financial burden on the company.
Oil marketing companies (OMCs) have raised retail fuel prices by roughly Rs 4 per litre in the last five days due to mounting losses amid soaring crude oil prices.
"When times are so uncertain, every day there is a significant movement in crude oil prices, it's not right to say what the exact number (for under-recovery) is right now.
"The Rs 4 hike has given us some respite. In the past, we have seen this type of tough situation with the Russia-Ukraine war, but in the long run we made it up.
"That is the reason there is no anxiety in the company. Our primary objective is to meet public requirements," said chairman and managing director Sanjay Khanna.
Refinery Operations and Expansion
BPCL has delayed the regular maintenance shutdown of its refineries to September from April to meet the country's fuel demand, said Khanna.
BPCL operates three refineries in Mumbai, Kochi (Kerala), and Bina (Madhya Pradesh), and is also working on building a greenfield refinery in Andhra Pradesh.
BPCL expects to complete the detailed feasibility report (DFR) of the greenfield refinery by June to finalise the investment requirement of the project, said Khanna.
Financial Performance and Under-recoveries
BPCL announced its fourth-quarter results on Tuesday.
The company reported a 28 per cent year-on-year (YoY) increase in consolidated net profit at Rs 5,624 crore in Q4 of FY26.
Revenue from operations rose 6.3 per cent YoY to Rs 1.35 trillion in the quarter.
Sequentially, BPCL"s net profit fell 21.7 per cent in Q4.
The drop in profits was on account of foreign exchange losses and impairment losses associated with BPCL's investment in a Brazil-based oil and gas project.
As of March 31, BPCL's under-recovery on sale of liquefied petroleum gas (LPG) cylinders stood at Rs 12,318.52 crore, it said in an exchange filing.
In FY26, the company received five equal instalments from the government as compensation for LPG under-recovery, aggregating to Rs 3,164.15 crore.
"The company maintained operational stability across its refining and marketing businesses during the quarter, ensuring uninterrupted fuel supplies while strengthening its nationwide distribution network amid a rapidly evolving global energy environment," BPCL said in a press release.
The company's refinery throughput came in at 10.4 million tonnes (mt) during the quarter, with capacity utilisation of 118 per cent.
Its domestic fuel sales grew 3.28 per cent YoY to 13.86 mt.
