Ladies and gentlemen, good day and welcome to Bharat Petroleum Corporation Limited Q1 FY 2027 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan. Thank you, and over to you, sir. Thank you. Very good afternoon to everyone. I would like to extend a very warm welcome to all the participants on the call, as well as our senior management team of BPCL. We have with us Mr. V.R.K. Gupta, Director of Finance, Mr. Pankaj Kumar, Executive Director, Corporate Finance, Mr. Ashish Goyal, Assistant General Manager, Corporate Treasury, Ms. Anuya Vatsal Thakar, Deputy General Manager, Finance, Pricing, and Insurance, Mr. Balagirish, Senior Manager, Pricing and Insurance. I'd like to hand over the call to Mr. Balagirish so he can start the disclosure. Thank you, Mr. Varatharajan. On behalf of BPCL team, I welcome you all to this post Q1 results call. Before we begin, I would like to mention that some of the statements that we will be making today during this call are based on our assessment of the matter, and we believe that these statements are reasonable. However, their nature involves a number of risks and uncertainties that may lead to different results. Since this is a quarterly result review, please restrict your questions to the Q1 results. I now request our Director of Finance, Mr. V.R.K. Gupta, who is leading the BPCL team for this call, to make his opening remarks. Thank you, and over to you, sir. Good morning, everyone. A warm welcome to the participants of today's investor call. Our Q1 2026-2027 results were released on the exchanges yesterday. I hope you had an opportunity to go through the same. The first quarter of FY 2027 unfolded again as the backdrop of a rapidly evolving geopolitical environment. Persistent tensions in West Asia created uncertainty across energy markets, influencing crude and gas sourcing, price economics, and supply chains. Although markets witnessed a brief period of stability during June, the latest geopolitical development has reminded us how quickly it can reshape the operating landscape. As we had indicated during our previous interaction, we expected the first quarter to be a challenging one, and it certainly was. However, instead of just weathering the storm, BPCL has focused on operational resilience and supply chain agility. With customer centricity as one of our core values, we stood steadfast in our commitment to serve the energy needs of our customers in all times. Throughout this period, our priorities remained unchanged. First, to ensure uninterrupted supplies of transportation fuels and LPG to our customers across the country. Second, to safeguard the interests of our stakeholders while managing costs responsibly. Third, to adhere to our long-term growth agenda while navigating through short-term volatilities. I'm pleased to say that our teams across refineries, marketing, and logistics worked together with remarkable agility to ensure continuity of operations throughout the quarter. The experience has also strengthened many of our internal capabilities. Let me cover the sourcing strategy first. Due to disruptions in tied-up term crude volumes, we proactively optimized our crude sourcing by significantly increasing spot crude purchases, with the spot percentage rising to almost 69% in quarter one FY 2027, from 44% in the corresponding previous year. We diversified our crude sourcing outside of the Strait of Hormuz, exploring multiple geographies, including increasing the Russian crude grades to 38% of our total procurement during this quarter. We also procured two new crude grades from Venezuela and Angola. The procurement strategy was achieved by overcoming multiple hurdles, including vessel availability, placement of price, insurance, et cetera. Further, I would like to reassure our stakeholders that we had already tied up our August volumes and are in the process of sourcing for September 26, providing us with adequate availability even as the geopolitical situation remains fluid. With respect to LPG, we ensured uninterrupted domestic supply by diversifying LPG imports during Q1 2027, as well as by maximizing indigenous production from our refineries. Further, various mitigative measures were implemented under the government's direction to effectively manage the demand-supply balance. Our gas business also demonstrated agility amid disruptions in global LNG markets. Despite force majeure under two major LNG long-term contracts, we ensured uninterrupted supply to all our bulk CNG and PNG customers by procuring from the spot markets. Coming to refinery, our refineries operated reliably throughout the quarter, supported by the flexible crude sourcing strategy. By maintaining stable refinery operations, we were able to navigate the dynamic operating environment effectively. During the quarter, our throughput was 10.15 MMT. Our gross refining margin for the quarter stood at $41.41 per barrel before factoring the impact of export duty and RIC. On the marketing front, demand was healthy across our key products, with the domestic sales volume at 13.62 million metric tonnes during the quarter. Across our retail network, petrol and diesel supplies remained largely uninterrupted throughout the quarter. Our retail network continued to deliver industry-leading productivity with an average throughput of 157 KL per retail outlet per month. We also strengthened our customer reach by expanding our network to 2,485 retail outlets, while our CNG network grew to 2,700 stations, reinforcing our leadership in CNG penetration. We also strengthened our premium fuels portfolio, achieving a 3.88% conversion to Speed 97 while expanding Speed 100 availability across 53 retail outlets. We proudly launched our first standalone BKF at Srinagar Airport, marking our entry into commercial locations other than our retail outlets and expanding our BKF network to 220 outlets across India by the end of this quarter. I'm also happy to share that we recently launched Bharatgas Lite ZIP in Mumbai, a lightweight 10 kg composite cylinder offering instant new connection, express delivery, enhancing customer convenience and safety. We have plans to expand the offering to 100 additional cities across 24 states by 15th August 2026. In our gas business, over Q1 of last year, bulk gas sales registered a growth of 3%, while gas sales across our geographical areas grew by 60% to 85 TMT, reflecting the strengthened momentum in this important growth segment. In line with our go-to-market strategy for petrochemicals, we recently launched our brand, B-Poly, for high-performance polymers. This reinforces our long-term objective of increasing petrochemical intensity and creating higher value product streams from our refining business. Let me touch upon certain milestones in our inorganic growth journey. While navigating near-term challenges, we are firmly committed to our long-term growth agenda. Our strategic priorities remain firmly on track during the quarter. We completed the acquisition of the remaining stake of 39.14% in IBV Brazil from Videocon Energy Brazil Limited, making it a wholly-owned subsidiary of BPRL. This strengthens our upstream portfolio and provides greater flexibility in developing overseas energy assets, mainly the assets that are in Brazil. We announced our strategic partnership with Tiki Tar and Shell India Private Limited through a 40% investment in the value-added bitumen venture at a value of INR 85 crore. This marks our entry into a growing specialty business aligned with India's infrastructure ambitions. We're combining Shell's technology, Tiki Tar's manufacturing capabilities, and BPCL's nationwide market reach. Coming to renewables, we advanced our initiatives in cleaner fuels and energy transition. We secured a capacity of 100 MW at an estimated CapEx of INR 860 crore in a wind utility tender in Madhya Pradesh, with project development expected to commence shortly. On CapEx front, despite the challenging external environment, we made steady progress across our major planned capital projects under Project Aspire. Majorly at Bina Petrochemical and Refinery Expansion project, we achieved a cumulative progress of 30.7%, with INR 5,900 crore incurred and INR 30,000 crore already committed. The geopolitical situation has impacted the supply chain procurement and execution of the project. There is no significant impact on the critical line items. Major long lead equipments have already been ordered, and we continue to work closely with our contractors and suppliers to minimize the impact on the overall project schedule. Other major projects, including the PRFCC project at Mumbai Refinery, which has completed 7% and scheduled commissioning date is September 29th. The Polypropylene project at Kochi, the scheduled commissioning date is May 28th. The project is completed 40% as on date, and the POL and ROBS licenses assignee are also progressing in line with the plan. During the quarter, capital expenditure stood at INR 4,433 crore. While project expenditure is expected to accelerate over the course of the year in line with the execution milestones, our full-year CapEx guarantee, INR 25,000 crore, remains unchanged. Our proposed Andhra Refinery project has also progressed through key developments, including licenses, tender evaluation. Land registration process for around 3,082 acres has been completed. Environmental clearance is expected from MoEFCC by Q2 2026-2027. Final approval is expected shortly. Reflecting on our financial performance, I would like to mention that while the external environment may influence the performance of an individual quarter, it does not alter our long-term direction. Our focus is on building a resilient, financially disciplined, and future-ready organization while responding swiftly to changing market conditions. At this backdrop, our financial performance for the quarter was primarily shaped by developments in the global energy markets. Despite underlying operations remaining strong, elevated international product prices during a large part of the quarter resulted in adverse marketing margins. In response, we undertook calibrated retail price revision of approximately INR 7.5 per liter across motor spirit and high-speed diesel, which helped to mitigate the marketing losses to some extent during the latter part of the quarter. Due to the sharp increase in the international LPG prices, as of 30th June 2026, the cumulative LPG compensation buffer stood at INR 15,804 crore after adjusting for the installments received against the already announced LPG compensation of INR 11,594 crore. We continue to work with the Government of India on the compensation mechanism and remain confident of their continued support for the domestic LPG business. As you would have seen from our results for the current quarter, the revenue from operations stood at INR 1 lakh 59,479 crore and loss of INR 3,962 crore on standalone basis. Further, the debt equity at standalone gross borrowings level is at 0.19x, with borrowings of INR 17,396 crore as on 30th June 2026. As the global geopolitical scenario evolves, our priorities are clear: operational excellence, disciplined growth, and sustainable value creation. We are closely monitoring global market developments and responding with prudent commercial decisions. That's all from our side. I will now be happy to take your questions. Thank you. Thank you very much. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question comes from the line of Probal Sen from ICICI Securities. Please go ahead. Good afternoon, sir. Thank you for the opportunity. First question was more of a housekeeping one. You mentioned about the GRM being basically a gross number, excluding the ACAD and other shares. Is it possible to share the net number? Net number after ACAD, you can roughly take around $ 17. Net number would have been closer to about $17. $17 per barrel, if you remove the ACAD component. Understood, sir. Sir, one thing in the detail shared, post the result is that marketing division has actually seen a positive inventory impact. If you can kindly make us understand a little bit, given that prices for crude also dropped a bit by the end of the quarter. Just wanted to understand Oh, sorry. What we have communicated only marketing trading gains means every fortnight when we see the RTP movements, the RTP differential in multiplier with what is the inventory we have. That we call it as [inventory] gain/losses, that we separately disclose. That is the marketing. Because if you compare with starting from 1st April, in the first two and a half months, the price is increasing trend. Only in the far- end of June the price decreasing has happened. The majority of the reason, the price increasing then. That was the reason for the quarter, it is recognized as inventory gains of around INR 3,000 crore. Is it fair to then say, sir, that in this quarter then, given that it has gone the opposite way, there could be then a negative inventory impact in the marketing segment? We don't know how it ends up by September now, because we thought the same thing in the beginning of the July. Things have changed. Right. We are not sure how the things will move, this is the way we calculate every fortnight, what is the RTP differential and what is the inventory we hold it. Accordingly, the differential we calculate and disclose as [inventory] gain/losses. Got it, sir. The other question was again regarding basically crude sourcing. Just wanted to understand in terms of numbers, how many days of crude have we actually already tied up? We look ahead at the next couple of months. Obviously, I understand there's a lot of uncertainty in terms of pricing and everything. In terms of absolute volumes, how are we placed for the next couple of months from a crude supply perspective? Broadly, I can explain the numbers. For example, if we are processing around 39 million metric tonne or 40 million metric tonne of crude, around 3 MMT, we source domestically from Mumbai High. Right. That means balance requirement around 36 million metric tonne to 37 million metric tonne. Every month, we need to import around 3 MMT, 3 MMT or 3.2 MMT. Sure. To give the numbers, as on June 26, we have inventory of around 3.8 MMT of crude. That means around 35 days crude already we have that year June, we have already concluded the contract for the month of July and August. We are hopeful whatever contracts we have committed, every contract they will be delivering. Based on the recent issues in terms of this Red Sea route, there may be certain issues in terms of couple of cargoes. Maybe we may not take that cargoes or they may not be in a position to supply. Otherwise, till 31st August, whatever crude requirements, it is sufficient, by maintaining around 30 days of crude also. For September, just now the window is opened for concluding the deals. Couple of cargoes already we have concluded. Maybe in the next one week or 10 days, whatever September requirement also we can complete it. That I can give up to September only the visibility. Beyond September, we have not started any contracting on the spot volumes. We have to wait and see some more time. That is very useful, sir. One last question, if I may. Earlier you had been guiding to what was the sort of crude cost effectively with respect to the benchmark, plus-minus whatever premium was, it was available. Is it possible to share the effective crude cost for Q1? I can give a directionally. In fact, a pre-war situation, the India basket benchmark and landing will be maybe $4-$5 loading. Okay? The benchmark and landing. Excluding the discounts of Russian Urals. Sometimes the discount will be $2-$3. If I remove the Russian discount, the benchmark and landing will be $4-$5. First quarter, this quarter, April to June, if you ask me, the benchmark and landing will be more than $15. Perfect. That is extremely useful, sir. Thank you so much. I'll come back if I have any questions. Ladies and gentlemen, you are requested to restrict your questions to two questions per participant. The next question comes from the line of Rishabh Shivkumar from Motilal Oswal Financial Services Limited. Please go ahead. Yeah. Hi, this is Abhishek from Motilal Oswal. There was some issue with the sound. April to June, you said the landing premium will be about $15 or so, right? One five. When I say benchmark, that is the Indian Basket. Indian Basket means it's a combination of all oil companies' procurement. It is not only for BPCL. When you say that benchmark, the differential of BPCL landing and benchmark will be around $13-$15 you can take. That is directionally. Okay. That has come down now to about $4-$5, right? No. I'm saying pre-war. Pre-war it was around $4-$5. Okay. Post-war it is around $13 - $15. Now, we have to wait for the second quarter, how it evolves. How it evolves. Okay. Fair enough. I'm seeing shipping rates come off quite sharply. Are you seeing lower You know I can give the benchmark. For example, pre-war, AG's Worldscale was hovering around 55% to 60% Worldscale. That is the benchmark. It went up to the peak level of 600%, the Worldscale. It came down to around 300%. Now it is hovering around 380% to 400%. That is the current benchmark indices for BPCL. Okay, perfect. Sir, just last question on the overseas E&P assets, what progress are happening with that, if you can update us on that? Actually, we have achieved great milestones in the last quarter, April to June quarter. Only let me talk about Mozambique. Mozambique, we have already announced the physical progress is 42% have been completed. Earlier quarters only, they have removed the force majeure and work is in full swing, and entire manpower is deployed there. Work is in full swing. In terms of the project finance, the lenders have agreed for continuing the project finance. All sales purchase agreements are continuing almost majority of quantity, whatever sales purchase quantities have been signed, they are honoring. In terms of that is what Mozambique. In terms of project completion, we are expecting the first gas we are expecting in financial year 2028- 2029. That is for the Mozambique project. The first project is only for two trains. The potential development is almost 16 trains. That means, in the first phase, we are developing a 13.2 million metric tonne of gas production, out of which BPRL, one of our subsidiary, is having 10% of the stake. That means our stake of molecule is around 1.3 MMT in the first phase of development. In the subsequent development, whenever it happens, additional volumes will come. That is on Mozambique. In terms of the Brazil, we have earlier 40% stake through one of our JV in the particular project. Out of that 40% stake, we have a 61% stake by BPRL and 39% by Videocon. During the insolvency proceedings, we have submitted our bid and we are successful, entire transaction has been concluded. That entire stake has been transferred to BPRL. Now we are having a 100% stake in 40% of the project PI. This project milestone is during this quarter, the operator has signed the FPSO contract, the work will be starting very shortly. The projected completion of the project will be 2030- 2031, the first oil will come. 2031- 2032, the first gas will come from Brazil. The expected reserve size is around 88,000 bpd, out of which BPRL have a 40% stake. These are two major projects, and other projects are small compared to these two. We have certain project development in Lower Zakum. One is in production block we have along with IOC, one is in Indonesia. Indonesia, we have submitted the FDP, but not yet started any work on that. These four are the major work in progress projects. Okay, perfect sir. Thank you so much. Thank you. The next question comes from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi. Good afternoon. Thanks for the opportunity. Sorry to interrupt, sir. On petrol you would be able to share the- Hello. Sorry to interrupt, sir. Your voice is not clear. Can you please use a handset? Yeah. Is it better? Yes, sir. Better. Please go ahead. Yeah. I was saying that in terms of diesel and petrol, what was your own sourcing and how much would have been purchased, if you could give a percentage split of the two? Do we have ready the numbers? Approximately, I can give. Our sales requirement around 80% our sourcing only. Maybe 10%-15% we procure on month-on-month basis. It may vary. Otherwise, indicatively 10%-15%. Is it the same for both MS, HSD, or are you giving a preference? MS will be lesser. Diesel will be higher, but it depends on the realization. For example, if you feel a diesel realization is more than MS, optimization point of view produce more diesel and lesser MS. In those quarters, it slightly changes. 5%-6%, it slightly changes. We have a swing of around 10% in one or the other refinery, so we can take MS more or HSD more, depends on the product realizations. Okay. Broadly 15% is purchased. Right. Secondly, on the crude inventory gains, you've shared the marketing gains. Could you give a ballpark number on the crude gains as well? That is what earlier also how many times we have clarified. Generally, we keep around 30 days of crude on an average. We don't generally calculate because our procurement price is a monthly average. We keep around 30 days inventory. We have stopped calculating what would be the inventory gains on crude separately. Sure. Fair to share that losses would have been minimal in the quarter for crude? I don't know. We have not calculated. Maybe you can say that minimal, most probably minimal, maybe $3-$4 or something. It depends on the price movement, how the price is moving. I can give you some rough number because our average crude value at 31st March is around $99. Now it is $95 or $96. Maybe $3-$4 impact. Understood. That's all, sir. Before we take the next question, a reminder to all the participants, to ask a question, please press star and one. The next question comes from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Thank you for the call, sir. First and foremost, I had a question around the refining side. You had some pretty good numbers around margins. Would you try to highlight where these margins came from, even if you take the ACAD impact out? How did you manage that? If you can give us a bit more subjective view around which refineries, Bina, Kochi, et cetera. What were the things that you did that you think can be sustainable and durable here in terms of Yeah the volatility in oil that we are going through now? Yeah. In that context, if you can give us some perspective, that would be very useful. A couple of reasons. One is definitely the cracks are high compared to any of the earlier years. Mainly diesel cracks and ATF cracks are very high. Second, our distillate yield also, we have maintained at the same level, around 84%, all three refineries put together. If you see individual refinery- wise, Bina is at 87%, better performance, and Kochi also better performance, 85%, beyond 84%- 85% range comparatively, on refinery side performance. In respect of GRMs, individual refinery wise, Bina will be definitely higher. Bina will be around $57 per barrel at gross level, means before special extra duty, export duty. MR is at $34 per barrel and KR is $39 per barrel. Bina mainly due to, they can process majority of the crude oil, high sulfur. High sulfur comparatively, it is cheaper than low sulfur. That was the reason Bina has contributed a lot. Okay. Sir, in terms of the crude sourcing, you said Venezuela has come in the mix. Yeah. Where do you think Venezuela now kind of continues? Do you think you can get to a certain percentage in terms of Venezuela? Two things, let me clarify. Venezuela, one is technically can our refineries process or not? Yes, technically we can process, but it cannot take it directly. We have to take a blend and do it. Technically, whenever commercially the Venezuelan crude is available, we can very well take. Certain point of time, why there is no continuity of Venezuelan crude procurement? Certain point of time, certain months, the offers what they are giving, it commercially did not viable. In particular months, if they are commercially providing a good offer, those particular months we are taking the cargos. That was the reason we are not in a position to take any term contracts for a continuity. As and when in a particular month, if the original crude is comparatively cheaper in terms of the crude value, then accordingly we take Venezuelan crude. Got it, sir. Sir, the last question I had was more in terms of marketing. You had in terms of non-retail, which is basically the industrial side on fuel marketing, what have you seen in terms of the market after the quarter in the last few months? Have you seen any types of discounting kind of go away now in the market because of where refining cracks sit and the ACAD? No. Discounting on what? Marketing margins? I'm not clear here. Marketing volumes for the industrial side. Yeah, marketing volumes already there is a dip in terms of diesel, but other products, due to non-availability of the products, there is a degrowth in the commercial segment. Mainly, most of our refinery production we have shifted to LPG production. Certain grades are not available for marketing. That was the reason there is a dip in I&C. But diesel definitely there is a dip. One is, there is a little bit of shift from direct to retail and certain segments where we are offering the price at a market operated price, means without any losses or we want to maintain the standard margin, there the volumes are dip. In the subsequent quarter, everything depends on the crude movements, how the crude will move, how the cracks will move, what is the parity between retail segment price and direct segment price. Accordingly, the volumes may change here and there. Okay. Thank you. Thank you. The next question comes from the line of Gagan Dixit from Elara Capital. Please go ahead. Yeah. Thanks for taking my question, sir. Sir, your standalone debt increased to INR 174 billion from INR 105 billion, although your balance sheet is very strong, if the fuel margins remains compressed for another quarter, can we expect that some slowdown in the discretionary CapEx or FY 2027 CapEx or your CapEx remain unchanged for the Bina, Kochi, PP or other projects, sir? Yeah. One is our direction, long-term direction, whatever we have committed the projects, all are good in terms of the returns point of view. We are not backing out any of the CapEx program now. Comes to the borrowing side, we have a gross borrowings of INR 17,000 crore, at the same time, if you refer the balance sheet, we have an investments of around INR 12,500 crore. The net borrowing is very small, INR 5,000 crore only. Even there is a cash process during this quarter, the net borrowings will be around INR 5,000 crore compared to the size of the balance sheet, the debt equity is very small. Based on this, even when we say this is temporary, maybe we are foreseeing maybe another one or two months things will stabilize, the cash flows will come back. End of the year, we are looking at a stable performance. With that, we are hopeful whatever cash flow requirement for our all future projects, those cash flows will be generated, and accordingly, we can complete the project without any big stress on the balance sheet. Sir, my next question is about the E&P business. Your consolidated loss was lower than the standalone loss due to INR 18.8 million exceptional income that from the FCTR classification after the Brazil subsidiary. Can you clarify whether this is only accounting in nature, and what are the CapEx commitments for Brazil and Mozambique over FY 2027- 2030? When we expect the first cash flow to generate from Brazil and Mozambique, sir? First question, rightly said it is not any incremental cash flow generation. It is pure accounting requirement because that JV becomes subsidiary. On account of this, when you do the accounting, accordingly the FCTR reserves, you have to route it through P&L and take it to the reserves. That was the reason this has come as a P&L addition, but there is no incremental cash flow on account. It is purely an accounting side. Come to the projects already Mozambique I have explained. Mozambique, we are expecting the first gas will come in the FY 2028- 2029. The volume molecule rate of the volume in the first phase of the development will be around 1.3 MMT per BPCL group. We are expecting with 100% volumes, we may generate around INR 350 million on the revenue side. Before interest and debt repayments, every year we will get around INR 350 million from Mozambique project. That is what we are expecting. Assuming a crude of around $65. We are not taking any very big assumption of crude. Even a crude is at a $65, we are expecting around INR 350 million something, it will come, cash flow. In terms of the Brazil, one big milestone we have achieved in Brazil is, this entire 100% stake in 40% AI, PI, we have acquired. Through NCLT process, Videocon share also we have acquired. The shares have been transferred in the name of IBV. Secondly, the Trade Association of Brazil also they have accepted. Whatever regulatory requirements are, we have completed all regulatory requirements, and it becomes a 100% subsidiary. Second development is during this quarter, whatever is required, the major milestone, FPSO contract has been signed with the vendors. Now the project has started. The project commissioning will be FY 2031- 2032. 2030- 2031 will be the first oil will come. 2031- 2032, gas will come. This is the additional revenue stream will come maybe after three, four years. Brazil also it will be on stream now. These two are the major projects are on upstream side. Sir, just a quick question, if it allows. Just, sir, what is the crude inventory at the start of the quarter? I think you told at the end of the quarter it is at 3.2 million metric tonnes then. What is the start of the quarter you were holding the crude? 31st March we have started the year at 3.55 MMT of crude. 3.07 MMT of crude. Closing will be 2.72 MMT in June. Our finished goods will be 3.79 MMT, crude is 2.72 MMT closing. Thanks for that. Thanks for your time. Thank you. The next question comes from the line of Kishan Mundra from DAM Capital. Please go ahead. Hi, sir. Thank you for taking the question. Sir, two questions. Firstly, can you share the profitability or the contribution that you have received from the PDPP unit during the quarter? The second question would be, sir, is how is the availability of Russian crude now for the month of September, and what are the discounts like? I mean, from the news we hear they are closer to $7-$8 per barrel. Is that true? Let me first explain on the PDPP. Thanks to the war, we have not started any of the production during this quarter PDPP. Whatever stream available, entire stream we have shifted to LPG production. There is no production of PDPP during this quarter. There is no profit, there is no production, PDPP. Second comes to the Russian crude availability. Till August, we have completed the deals, even including the Russian Urals or ESPO. September offers are coming. We have to wait maybe next one week, we will come to know what would be the discount scenario. Definitely based on the recent development in the crude market, now no one is offering any discount for Russian crude. Okay, understood. Thank you, sir. Thank you. The next question comes from the line of Sumeet Rohra from Smartsun Capital Pte. Ltd.. Please go ahead. Hi, sir. A very good afternoon to you and your entire team. Sir, firstly, congratulations on keeping the country on in such a tough environment. Sir, I have a couple of questions more on the investor angle. Can you quantify what's the marketing loss we've incurred in terms of subsidizing fuel? Secondly, sir, what is your LPG negative buffer? If I'm not wrong, it's about INR 15,000 crore-INR 16,000 crore. Sir, the matter of fact is that we are subsidizing product and selling in the bigger interest of the country. What's the government support that we are looking at? Because obviously this is affecting not only the balance sheet of our company but also the shareholders. Can you please, I mean, give your thoughts on this, sir? Thank you very much. Firstly, on LPG compensation, cumulative compensation buffer is INR 15,804 crore as on 30th June. This is the cumulative number. Definitely we are hopeful government will support, but only thing timing is the issue when we will get the money. Like earlier precedences, whenever LPG losses are there, government always they have subsidized, and they have supported. This also we are expecting we will get support. In terms of the fuel side marketing under-recovery, it is not fair to calculate marketing under-recovery only on the marketing side because when your cracks are hovering at $60- $70, sometimes ATF is gone up to $100, you have to see an integrated level what is your losses. It is not fair on our account showing a refining side good margin and showing marketing under-recoveries on the other side. Better to have a clarity on the overall integrated level that is the performance we have shown in the quarter one. There are under-recoveries if you see marketing individually, but when you see the cracks are very high level of cracks, it is not fair on our account to say this is my marketing under-recovery. We have to see integrated level what is our under-recovery. Otherwise, we can say some number, INR 40,000 crore- INR 50,000 crore, but whether this number is having a relevance or not, I'm not sure when you have a good amount of cracks. Sir, my question comes from this is a matter of fact that shipping costs are elevated and these are not normal times. Today India has taken the lowest amount of fuel price increase. Obviously, there is the economic interest of companies that are getting affected. Can you basically help understand on that point as well? No, that is what I'm saying. We have thought it is only temporary in the first week of July, the complete scenario changed. We are hopeful in case of crude comes down to $80, $85 in the coming months, definitely whatever we are saying is an under-recovery, definitely we would be in a position to recoup those. Things again changed. Again, crude is going up to $90- $95. We have to wait and see. These are all very short-term spikes. Overall, if you ask me what is the availability of crude overall world side and what is the demand, still crude is surplus. At least 2 mmbpd surplus. When demand supply gaps at the worldwide, if it is coming on the supply side surplus, I'm not sure this crude prices will come in at $90 or $95. It has to come down to at $80. Only thing is that short-term, this war-like situation, say sometimes Strait of Hormuz issues, sometimes Red Sea issues. Let us see, these things should resolve maybe another one month or one and a half months. We'll see the stable markets. Okay, sir. Thank you so much and wish you all the best, sir. Thank you. Thank you. A reminder to all the participants, to ask a question, please press star and one. The next question comes from the line of Vikash Jain from CLSA. Please go ahead. Hi, sir. Thanks for taking my question, sir. I have two of them. Firstly is, I just want to understand this whole inventory gain and marketing. Also the fact that you said that at the end of June, crude that you had has been earmarked at about $95 a barrel or so. But if I were to look at Brent, June closing for Brent was closer to about $73- $74 or so. What am I missing here? In case of marketing, is it that it was transferred at a price earlier and it stayed there and it was much higher? Is that how the inventory gain has happened despite the collapse of price towards the end of June? Let me explain a little bit on the accounting side, how do you value the raw material. When you have a marketing division also in your organization, then we have to derive what is the net realizable value from the RSP side. Okay. That means if current RSP is at x amount, at $95 crude at landing level, I can value at $95. I need not value at the replacement cost. Okay. In case if I'm a trading entity, if I have a holding the crude, then if I don't have any marketing, then crude replacement I have to value it. That is the difference. Even when you say Brent 30th June, if it is $72, why we have not valued at $72, only at $95? Because my realization is at RSP. We value from the realization side. That is the reason $95 crude still it is being valued in the books of accounts. Second, gain or marketing losses when we give, they are only advances gain losses, only we are giving a separate indication. If I would have continued with the standard margin, either this will be an addition or this will be a deletion. If I'm maintaining a continuously standard margin, this impact will be an addition or deletion to my standard margin. Okay. That is it. Specifically, we give it separately. Sorry, sir. Just one clarification on that thing that you explained. Simply put, unless crude price goes lower than what the product realization will be- Yeah which is what you call, there is no reason for you to earmark it down. I mean, you would have For example, if my RSP is at INR 90, definitely I would have write down. If my RSP is at INR 105 for MS, HSD is maybe INR 95 something, still I can value at INR 94-INR 95 up to my cost of production. Okay. Just one thing on ATF, sir. What is happening over there? There are obviously large losses. This, by definition, is not a subsidized product. We are in a relatively new situation over there, and I think some of the airlines have not taken the option of stable prices. You're forced to cut prices also. How do we think we'll recover the prices over there? Two things. One is International segment, second is Domestic segment. International segment, definitely the complete pass-on has happened. The crash at $100, we have completely recovered. In terms of domestic, yes, government has introduced a Market Stabilization Fund, unfortunately, no airline players have come forward and they sign the MoU. Let us wait for some more time. Otherwise, we are continuing to pass on the price increase, not immediately, on a phased manner. Initially, we have increased only 25%, and next month we have increased a little bit. Subsequently, in the last revision, INR 115 we have increased, and next, since the prices have come down, again, we have reduced to INR 110. Accordingly, the ATF pricing, we are moving in line with the market price movements. Okay. What is the loss in the quarter for ATF? Can you give me that number? We are not worked out separately. There are losses in domestic segment. There are lower acquisition in International segment. Domestic segment, we have not calculated because if we calculate whether including export duty or excluding export duty, so many conversions can create. Yes, there are losses. April, May, June, we have not passed on the full price cut to the market. There will be some losses. What proportion of your sales is international for ATF? I can give roughly 55%-60% international and 43%-45% domestic. Okay. Thank you so much, sir. Thanks a lot. Thank you. The next question comes from the line of Sarthak Tita from DSP Asset Managers. Please go ahead. Hi. Thank you so much for the opportunity. Congratulations to the team to weather the impact of this difficult quarter. Just one question and understanding from my side that I require. What is happening majorly on the LPG side? I can see that there was some downturn on marketing volumes of LPG in this quarter. I just want to understand how is this quarter looking, Q2, compared to Q1 FY 2027. If you can help me with the per cylinder under-recovery in terms of rupees in Q1. That would be helpful, sir. Yeah. Firstly, yes, we have seen the LPG domestic de-growth in Q1, significant de-growth. It's a double-digit almost to 14% or 15% de-growth. We are expecting a little bit de-growth even during this quarter also. Main reason for de-growth in the Q1 is mainly a little bit shortage of the supply. Secondly, we have introduced a large control mechanisms in terms of the delivery, booking and other things. Today we can probably say the bookings are happening more than 90% digital bookings and even delivery confirmation through SMS also very high percentages. This is one control which we have done in LPG so that there should not be any shifting from domestic to commercial. Second initiative as a part of Government of India initiative, we have increased PNG connections. Wherever we have geographical areas where we can lay down the connections and give the PNG connection to the customers, significantly our efforts have been put and accordingly the connections have been created in PNG side, and around 30,000 - 40,000 connections have been surrendered from LPG. This is the trend we are looking at it. There may be some good amount of numbers we'll see from LPG consumption to PNG consumption, mainly for the urban segments. Wherever we have geographical areas, definitely this is going to happen. This quarter, definitely we are not showing any big growth in LPG. Definitely there will be a little bit same level of volume or there will be a de-growth in LPG. Per cylinder under-recovery, July CP, if you take as a base, the per cylinder i s INR 490. August CP already announced by Saudi it is $592. With this $592 CP, it is INR 210. Since the crude prices have gone up, maybe next month if they increase again CP, then this under-recovery can change. Understood. Fair enough, sir. Just one small clarification. You mentioned that the LPG share in this quarter is lower. Is it fair to assume that the share of petrol and diesel will be even higher in Q2 than Q1? Q2, we are expecting growth will be there. Everything depends on price. If, for example, if consumer face prices are going up, we are seeing a pattern, they are taking more volumes, so the growth will be there. Otherwise, if you see seasonal, whatever 2%-3% growth we expect, that is what we are foreseeing this quarter. Fair enough. That's it from my side. Thank you very much, and all the best. Thank you. Thank you. Before we take the next question, a reminder to all the participants to ask a question, please press star and one. The next question comes from the line of Pratyush Kamal from InCred Equities. Please go ahead. Hello. I'm audible, sir? Yeah, please. Okay. There are two questions in my mind which I wanted to ask. One is regarding the difference between the landed cost and the index of sales, Brent. Since you said that at the pre-war level it was near to about $6- $7 and now it has come up to a level of $13- $14. The question which arises in my mind that if I look at the VLCC rates, it has come down to the pre-war level because that is something which is pretty evident from Baltic Dirty Tanker Index. At the same time, if I look at the U.S. Gulf Coast to India free trade, it has also come down to a pre-war level of about $8.14 per barrel. The only thing which is left is the Middle East to India free trade, which is still elevated of about 68%-70% compared to what it was at the pre-war level. Just wanted to understand why is the difference of near to $7- $8 per barrel coming up between the pre-war and the post-war? Is it because of you sourcing a lot of crude from Middle East or partially it is because of insurance and other costs, because of which you are paying higher cost. Just wanted to get a higher glance on that. Yeah. When we say post-war means it is during Q1. Q1, this particular benchmark and landed the differential is on account of major three components. One is the freight definitely, second is the insurance, the third one is premium, what you paid to the supplier. Okay. During April, May, June, during these three months, most of the cargoes you are not in a position to purchase at a benchmark. Benchmark plus premium you have to pay because the spot basis where the crude availability is lesser, then when we negotiate, we are not in a position to get any crude at benchmark. Compared to pre-war period, the benchmark plus premiums are high. In certain cargoes the premiums have gone up beyond $10. That was the reason. Pre-war situation, most of the cargoes are available at benchmark level without having any premiums or sometimes it may be a $0.5 or $1 discount. Post-war, there is no discount, there is no benchmark price availability. Always you have to pay the premium. If you ask me current what is the situation? Yes, definitely the freight rates have been improved current period, maybe last one week or 10 days if you ask me. Freight rates VLCC it has been improved. AG side still the benchmark Worldscale still it is hovering around 380%- 370%. That is the reason still I am saying the benchmark and landing it is hovering at a big component. Maybe one or two months it may settle it. Got it. Understood, sir. Did you see the VLCC supply grid coming up in the freight market because of a lot of convergence of the Aframax and Suezmax tankers into the product slate, into the crude slate because of taking the arbitrage advantage of the higher freight rate which was at the peak war level in the crude market compared to the product market. Do you see any VLCC supply grid coming up which will lower the prices going forward even more compared to what it was at the pre-war level? See, everything demand supply. Everything demand supply will balance out over a long period of time. Maybe temporary one or two months or three months during the war period, everything is on higher side, but we are expecting everything will balance it out. Whatever, for example, free supply and free demand over, everything will change. This is only temporary. Every component on a higher side, freight is higher, insurance is higher, and your premiums are higher. Now, premiums no more they are commanding a $10 premium. Already the premiums have come down. Sometimes in the first week of July, even we got a good amount of discounts, also $3- $4 discounts of Russian oils. Everything depends on the market dynamics, how it moves. Temporary, you should not take it as a benchmark. Maybe we have to see long-term only. Got it, sir. Just last one question regarding the marketing inventory gain which you posted. Wanted to understand what component of it is coming from the higher retail diesel and petrol prices. Again, the marketing gain could either come from the higher realized diesel and petrol prices or from the lower, I'll say, the crude prices, or definitely your higher inventory, which you would have posted in Q1 compared to Q4. What components are- It is- -coming out from? It is a simple calculation. There is no component. What is the RTP of first fortnight and what is the RTP of second fortnight? The differential in the RTP multiply what is the quantity we are holding. That's a simple calculation. Okay. There is no component analysis. Have you increased any quantity? Have you increased the quantity of the holding of the final product? The holding of the inventory. Holding of the inventory with the adjustment of change of inventory. Okay, got it. Thank you, sir. Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr. Varatharajan for closing comments. Thank you, and over to you, sir. Thank you, Atharva. Gupta j i, if you have any closing comments sir? Thank you. Nothing else. Thank you. Yes. I also thank all the participants and senior management of BPCL for taking time out to participate in the call and share all the details. Thanks, everyone. Have a nice day. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.