Petrochemical margins remain subdued
Petchem spreads continue to be weak due to global oversupply and weak demand, though IOC expects positive EBIT contribution for the rest of the year.
IOC / Q2-FY26 / risks
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Indian Oil Corporation · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
LPG compensation uncertainty beyond FY26
While ₹30,000 crore compensation was approved, management noted that LPG remains a controlled product and future under-recoveries may not be fully compensated; the government will decide on a cumulative basis at year-end.
Inventory losses could reverse
Q2 saw an inventory gain after a ₹2,300 crore loss in Q1; crude price volatility could lead to further inventory losses, impacting reported profits.
Russian crude discount narrowing
The discount on Russian crude has narrowed to $2-3/bbl from higher levels earlier, and sanctions compliance may limit availability, potentially impacting GRM outperformance.