HPCL’s Q1 FY27 under recovery on petrol, diesel and LPG hits ₹26,000 crore

State-run Hindustan Petroleum Corporation (HPCL) on Thursday said that its cumulative under recovery on petrol, diesel and liquefied petroleum gas (LPG) stood at around ₹26,000 crore in the April-June quarter as the conflict in West Asia.

Responding to an analyst query at a post-results call, HPCL CMD Vikas Kaushal said: “For the whole quarter, there is a significant under-recovery on this… Just to give you a sense, the marketing under-recovery for the whole quarter was upwards of ₹26,000 crore... It was a significant under-recovery for the whole quarter. Every litre which you and I were buying from petrol pump was being subsidised by one of the three OMCs.”

HPCL reported a consolidated net loss of around ₹12,265 crore in Q1 FY27 as the West Asia conflict pushed up crude oil prices while PSU OMCs sold petrol, diesel and LPG at below market cost impacting margins.

Due to the closure of the Strait of Hormuz (SoH), crude oil prices surged as West Asian cargoes got stranded. Besides, it also impacted supply of LPG and LNG with India among the major impacted countries. PSU oil marketing companies (OMCs) have incurred high under recoveries as they sold peril, diesel and LPG at below market rates.

The OMC attributed the impact to suppressed marketing margins on certain petroleum products.

According to Equirus Securities, the average Brent price: stood at $97 per barrel, an over 25 per cent growth Q-o-Q and around 45 per cent Y-o-Y in Q1 FY27. The average Saudi propane prices stood at $682 per tonne, growing by over 26 per cent Q-o-Q and over 17 per cent Y-o-Y.

HPCL expects higher LPG under recoveries in January-March 2026

HPCL’s under recoveries on LPG as on June 30, 2026 were around ₹16,405.92 crore, against ₹12,798.67 crore as of March 31, 2026 and ₹13,042.56 crore on June 30, 2025.

To another analyst query, Kaushal said that for the entire Q1 FY27, HPCL’s LPG loss stood at around ₹510 per cylinder. The loss is around ₹680 crore in June 2026 and ₹490 per cylinder in July 2026.

HPCL’s standalone and consolidated debt increased sharply by ₹ 25,000 crore Q-o-Q to ₹72,600 crore and ₹75,900 crore, respectively. Increase reflects significant working-capital and funding burden created by elevated crude costs and marketing under-recoveries, Equirus added.

The HPCL management said that debt reduction is a top priority, with a goal of bringing the debt-to-equity ratio back toward 0.8 over time.

The OMC has also initiated measures to optimise its operations through project Samriddhi. In FY26, HPCL launched Samriddhi 1.0, which is a structured EBITDA improvement programme that delivered accruals of ₹1,691 crore.

Building on this success, HPCL has now launched Samriddhi 2.0, an enterprisewide programme targeting at an EBITDA improvement by ₹1,500 crore, out of which ₹1,000 crore is targeted as accrual for FY27.