India Energy: Tracking Margins

Research evidence excerpt

India Energy: Tracking Margins

Update

June 15, 2026 03:00 AM GMT

Morgan Stanley Asia (Singapore) Pte.+MIndia Energy | Asia Pacific Mayank Maheshwari

Equity Analyst

Tracking Margins Mayank.Maheshwari@morganstanley.comMorgan Stanley India Company Private Limited+ +65 6834-6719

Pranitha Shetty

Indian fuel retailers' losses are much lower than the market anticipated, and we see Research Associate

current oil prices already moving transport fuel integrated margins to be positive for Pranitha.Shetty@morganstanley.com +91 22 6118-3022

Hinal Choudharythe first time in the past three months. While cooking gas (propane) margins are

Research Associate

still US$400/ton ( down from US$540/ton), we do expect fuel retailers to see a Hinal.Choudhary@morganstanley.com +91 22 6118-2044

~20% reduction in book value (vs buyside expectations of 25-30%). See Energy

security in play. India crude sourcing has continued to see reduced crude premiums

and increased availability of crude supplies, but global middle-distillate and gasoline

inventories remain tight, supporting refining economics despite the current volatility

in crude markets.

India Oil & Gas

Asia Pacific

We prefer HPCL and IOCL given their improving refining-to-marketing integration, Industry View In-Line

refinery upgrades and earnings inflection beyond the current oil shock. We see

further upside surprises ahead as the policy playbook of the past decade gradually

realigns in favour of dependable and secure energy supplies. See more in Energy

Meets Compute: Supercycle Recharges.

Exhibit 1: India’s fuel refinery‑cum‑retailer margins have improved materially as

policy support, lower crude premiums offset oil shock pressures

Integrated Margins (US$/bbl)

IOCL BPCL HPCL

18.0 16 15 15 14 13 13 12 12 12 10 12 11 10 10 10 11 11 10

9 9

8 8