State-run Hindustan Petroleum Corporation (HPCL) has significantly reduced imports of Russian crude oil on a quarter-on-quarter basis in Q2 FY26 citing refinery economics while favouring Middle Eastern and West African grades.

The country’s third largest PSU refiner, which operates more than 24,000 fuel retail outlets, imported 5 million tonnes (mt) crude oil during the September quarter in FY26 of which Russian crude oil accounted for 5 per cent. This is in contrast to grades from Moscow accounting for 13.2 per cent of its total imports in Q1 FY26.

“In Q2 FY26, if I look at the total crude we bought, it was around 6.1 mt or whereabouts of total crude we had, of which 1.1 mt was indigenous crude and 5 mt was imported. Russian crude in my overall basket was only 5 per cent in the last quarter for a very simple reason. Whatever parcels could look at, they were not economical to run on our refinery. We run a lot more on Middle East crude and increasingly on West African crude,” said HPCL CMD Vikas Kaushal responding to a query in a post-results analyst call on Friday.

Kaushal, who took over the CMD’s role at the Maharatna company in March 2025, has over three decades of experience in the energy sector and is probably the first private sector leader to head a state-controlled refiner.

He emphasised that Russian crude oil does not keep him awake as purchasing barrels is a function of economics with the decisions based on crude oil prices, quality and which refinery can process which grade.

“Frankly, for 5 per cent crude which on a run rate basis which (we) are running in our refineries, I am not losing my sleep. I can easily get them from other sources. So, I don’t worry about it as much as the press or others worry because we are very well structured there on our assets on other crudes... We know which crudes we need to get the margins. We could run Russian crude also there, but we have alternatives with us,” he explained further.

During HPCL’s April-June quarter’s post results analyst call, Kaushal responding to a query said “We do a very rigorous exercise on how we buy crude. And we’ve only gone deeper and wider in this exercise. As we said, the Russian thing is just a few days old in terms of the sanctions. But as a team, we were already looking at what is the best economic decision for us.”

He informed that Russian crude oil was 13.2 per cent in the oil marketing company’s (OMC) overall portfolio, which was lower than last year.

“And it’s not because of any geopolitical reason. It was economic decisions on what we needed to run in our refineries. We did that. In this quarter, the only place we ran Russian crude was in our East Coast refinery in Vizag. In Mumbai, we found other crudes to be more attractive.”

While in Q2 FY26, the company processed one new grade of crude oil, HPCL refineries processed imported crude Khafji (Saudi Arabia and Kuwait) and Varandey (Lukoil), as well as indigenous crude KGDWN for the first time in Q1 FY26.

Source: The Hindu Business Line 

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