Indian Oil raises Russian crude share to 24% in Q1, sees refining capacity hitting 98 MTPA by 2026

New Delhi: Indian Oil Corporation Ltd (IOC) increased the share of Russian crude in its refining mix to 24 percent in the April–June quarter of FY2025-26, up from 22 percent in the previous fiscal, even as discounts moderated.

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Russian crude imports and discounts

Speaking at the company’s post-results conference call, Anuj Jain, Director (Finance), said, “As far as 2024-25 was concerned, we almost processed 22 percent Russian crude oil, which in quarter 1, it got increased to 24 percent. And July and this quarter is still going on. And the discount as usual, everybody has said the same thing. It's in the range of around USD 1.50 to the Dubai benchmark.”

IOC, like other Indian refiners, has been a major buyer of Russian crude since Western sanctions reshaped global oil flows, though discounts have narrowed compared to the immediate post-Ukraine war period.

LPG under-recovery narrows

Jain also highlighted improvements in the cooking gas segment: “If you see the LPG under recovery in last quarter in Q1 financial year 2025-26, it was around in the range of Rs 160 to Rs 165 per cylinder. And today, it is in the range of Rs 100 to Rs 105 per cylinder as on date.”

The Cabinet has approved a compensation of Rs 30,000 crore to cover some of the losses incurred by the three state-run oil marketing companies (OMCs) on the sale of LPG cylinders. However, the modalities of the allocation are yet to be communicated by the ministry to the OMCs, said Jain.

Demand growth and capacity expansion

Nitin Kumar, CGM, Corporate Finance, pointed to robust demand growth: “For the current financial year, PPAC (Petroleum Planning and Analysis Cell) forecasts 4.65 percent growth in domestic consumption of petroleum products. This continued expansion reinforces India's role as a key driver of global oil demand in 2025. As the country's largest oil refiner and marketer, we remain steadfast in our mission to ensure energy availability across the nation at affordable cost.”

He said IOC’s three major refinery expansion projects — Panipat, Gujarat, and Barauni — are progressing well and on track for completion by 2026. “With these expansions, our group refining capacity will increase from 80.8 million metric tonnes per annum to 98 million metric tonnes per annum, providing a critical boost to our ability to meet growing national demand and support India's vision of energy self-reliance,” Kumar added.

Petrochemicals and clean energy plans

IOC is simultaneously ramping up investments in petrochemicals, aiming to raise integration from 6 percent to 15 percent by 2030, and pushing into alternative energy. “On the clean energy front, we are scaling up investments in electric mobility infrastructure, including EV charging and battery swapping stations alongside projects in natural gas, compressed biogas, biofuels and green hydrogen, including hydrogen mobility solutions,” Kumar said.

He added that the company anticipates gradually tapering spends on conventional assets while directing a greater share of capital expenditure towards petrochemicals and alternate energy segments. The company has budgeted Rs 34,000 crore capex for FY26, with large spends earmarked for refineries, petrochemicals, pipelines, CGD, and renewables.

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