OMC Earnings Under Pressure Due to Q1FY27 Under-Recoveries
Oil Marketing Companies (OMCs) in India are facing a challenging outlook through the 2027 fiscal year, with profitability expected to be squeezed by significant under-recoveries. Despite a recent uptick in sentiment due to cooling crude prices, domestic brokerage Prabhudas Lilladher warns that structural and regulatory headwinds will continue to weigh on margins.
The Impact of Under-Recoveries and LPG Losses
The primary concern for OMCs lies in the projected under-recoveries for Q1FY27. According to the Prabhudas Lilladher report, the industry is expected to face under-recoveries of ₹7/litre for Motor Spirit (MS) and ₹10/litre for High-Speed Diesel (HSD). These figures take into account a ₹10/litre excise duty cut and a capping of cracks at USD 10/bbl for MS and USD 15/bbl for HSD.
Liquefied Petroleum Gas (LPG) remains the most significant pain point for the sector. Losses for LPG are estimated to reach approximately ₹500 per cylinder in Q1FY27. This follows a period of intense volatility; data shows that while LPG under-recoveries were around ₹170/cylinder in April 2026, they surged to a range of ₹610–₹670/cylinder by May 2026. Adding to this pressure, Saudi CP prices are expected to jump by 47% quarter-on-quarter for Q1FY27 due to supply constraints stemming from West Asian disruptions.
Regulatory Risks: The Excise Duty Rollback
A major overhang for the earnings of OMCs is the potential rollback of excise duty cuts. The ₹10/litre excise cut was initially introduced as a crisis management measure rather than a permanent fiscal policy. As crude oil prices moderate and retail price hikes are implemented, there is a growing possibility that the government may gradually withdraw these benefits.
The fiscal implications for the government are substantial, with the excise cut currently resulting in a revenue impact of approximately ₹1,700 billion per year. While the brokerage expects any rollback to occur in a phased manner, the mere possibility of this move continues to act as a pressure point for OMC stock valuations and bottom-line stability.
Crude Oil Volatility and Inventory Rebuilding
原油価格に関するセンチメントは、地政学的な緩和と需要側の補充との間で、綱引き状態が続いている。米イラン間の停戦やホルムズ海峡の正常化の可能性により、ブレント原油は1バレルあたり80米ドルを下回る水準まで下落したが、専門家は価格が長期間低水準にとどまる可能性は低いと警告している。
同レポートは、各国が最適な資源レベルを維持するために戦略石油備蓄（SPR）および一般在庫の補充を開始するにつれ、追加的な需要が価格を再び押し上げる可能性が高いことを強調している。イランの石油輸出再開が見込まれる一方で、世界的な在庫積み増しへのシフトが価格の下支えとして機能し、原油コストの大幅な下落傾向を防ぐとともに、インドの製油業者にとってのマージン圧縮リスクを存続させることになる。
主なポイント
- 収益性の圧迫: OMCは、2027年度第1四半期において、MS（ガソリン）でリッターあたり7ルピー、HSD（軽油）でリッターあたり10ルピーの回収不足に直面すると推定されており、LPGの損失は1ボンベあたり500ルピーに達すると予測されている。
- 財政的な不確実性: リッターあたり10ルピーの物品税減税が段階的に撤回される可能性は、OMCの長期的な収益における重要なリスク要因であり続けている。
- 原油の動向: 地政学的緊張は一時的に緩和されたものの、世界的な在庫の積み増しやサウジアラビアのCP価格の47%上昇により、市場のボラティリティは維持される見通しである。