Reliance O2C EBITDA rises 67.9% as fuel cracks hit highs

Reliance Industries Limited reported record Oil to Chemicals (O2C) earnings before interest, tax, depreciation and amortisation (EBITDA) of ₹25,203 crore in 2Q FY27, up 67.9% year on year. Historic transportation-fuel cracks, higher energy prices and improved downstream chemical margins lifted the result, although special additional excise duty costs and Jio-bp under-recoveries constrained earnings.

Why did Reliance O2C EBITDA rise in 2Q FY27?

Reliance’s O2C EBITDA rose because transportation-fuel cracks reached historic highs and downstream chemical margins improved in 2Q FY27. Segment revenue increased 44.2% year on year to ₹2,31,601 crore, while EBITDA grew faster at 67.9% to ₹25,203 crore. The EBITDA margin increased by 160 basis points to 10.9% from 9.3% in 2Q FY26.

Higher energy and chemical prices supported the revenue increase. Reliance said crude oil prices rose 40.6% year on year and transportation-fuel prices increased by 50% to 78% after Middle East conflict disrupted supply chains. Prices for most downstream chemical products were also 25% to 35% higher year on year in 2Q FY27.

The sequential figures also show the change in the quarter. Revenue increased from ₹2,01,803 crore in 1Q FY27 to ₹2,31,601 crore in 2Q FY27, and EBITDA rose from ₹17,010 crore to ₹25,203 crore. For 1H FY27, EBITDA reached ₹42,213 crore against ₹29,519 crore in 1H FY26, while revenue rose to ₹4,33,404 crore from ₹3,15,362 crore.

How did supply disruptions lift fuel margins?

Supply disruptions lifted fuel margins by tightening crude and refined-product availability despite lower global oil demand in 2Q FY27. Global oil demand fell 3.4 million barrels a day year on year to 102.5 million barrels a day, including a 0.35 million-barrel-a-day decline in diesel demand and an approximately 0.3 million-barrel-a-day fall in gasoline demand.

Dated Brent crude averaged $97 a barrel, up 40.6% year on year, after disruptions in the Strait of Hormuz and the temporary shutdown of Saudi Arabia’s East-West pipeline tightened balances and drew inventories. Global refinery crude throughput fell 3.5 million barrels a day to 80.9 million barrels a day after attacks on refining infrastructure in the Middle East and Russia.

Reliance said fuel cracks rose by 3 to 3.7 times year on year during 2Q FY27. Singapore 92 RON gasoline averaged a $24.9-a-barrel crack, up 196%; 10-parts-per-million gasoil averaged $65.8 a barrel, up 252%; and jet fuel or kerosene averaged $59.3 a barrel, up 268%. The company linked these moves to refinery outages, lower inventories, shipping disruption through Bab el-Mandeb and Russia’s diesel export ban.

What changed in Reliance’s chemicals business?

Reliance’s chemical margins were mixed in 2Q FY27 because higher selling prices were partly offset by rising feedstock costs. Domestic polymer demand declined 3.5% year on year as product availability was limited and prices were elevated. Seasonal monsoon weakness and need-based purchases also affected agriculture, furniture and household demand.

Polyethylene and polypropylene deltas increased to $340 a metric tonne, up 5% and 8%, respectively, as both product prices rose by about 29% to 30%. In contrast, the polyvinyl chloride delta declined 19% to $295 a metric tonne because its 13% price increase did not keep pace with naphtha and ethylene dichloride costs, which rose 43% and 57%, respectively.

The polyester chain produced the largest margin improvement among the disclosed chemical measures. Its delta rose 33% to $573 a metric tonne, the highest level in three years, supported by paraxylene and purified terephthalic acid deltas. Domestic polyester demand still fell 6.1% year on year, while polyethylene terephthalate demand grew 5.3%, supported by beverage-sector demand.

How did Reliance manage crude supply and exports?

Reliance maintained crude runs in 2Q FY27 by sourcing agilely from the Strait of Hormuz and from Latin America, North America and the Mediterranean region. The company said this limited the effect of a wider Arab Gulf crude differential and freight rates that surged 15 to 20 times during the disruption.

Total throughput was 20.6 million metric tonnes in 2Q FY27, down 1.0% from 20.8 million metric tonnes a year earlier but up from 18.1 million metric tonnes in 1Q FY27. Production meant for sale was unchanged year on year at 18.1 million metric tonnes. Reliance supplied high-speed diesel and motor spirit to Jio-bp outlets, industrial channels and public-sector undertakings facing shortages.

Exports increased 46.9% year on year to ₹1,04,250 crore in 2Q FY27. Reliance redirected light distillates to East and South Africa and middle distillates to Europe, Latin America and West Africa, which it identified as the highest-netback markets during the quarter.

How did Jio-bp perform during the disruption?

Jio-bp increased combined motor spirit and high-speed diesel volumes by 4.2% year on year to 1.83 million kilolitres in 2Q FY27. Its high-speed diesel market share reached 5.46% and motor-spirit share reached 3.86%, while reported market effectiveness was 2.34 times and 1.72 times, respectively.

Reliance BP Mobility Limited, operating under the Jio-bp brand, had 2,304 retail outlets, more than 5,900 electric-vehicle charge points, 200 compressed biogas and compressed natural gas stations, and 184 convenience stores. Reliance said Jio-bp kept its network fully stocked and priced at parity with the industry during the period of crude and product-price volatility.

Jio-bp Pulse electric-vehicle charging volumes rose 60% year on year to 15.8 gigawatt-hours in 2Q FY27. The network had 5,943 charge points at more than 1,100 locations and reported charger uptime of about 95%. Clean N Green gaseous-fuel volumes rose 121% to 18.1 thousand metric tonnes, while aviation turbine fuel volumes were 36.3 thousand kilolitres.

Conclusion

Reliance’s record 2Q FY27 O2C performance combined a 67.9% EBITDA increase, a 160-basis-point margin expansion and 46.9% export growth. Refinery disruptions in the Middle East and Russia tightened fuel balances, while the polyester-chain delta reached a three-year high; weaker domestic polymer and polyester demand limited part of the chemicals contribution.

The next factors to watch are the unresolved volatility in crude and product prices, continued special additional excise duty-related costs and Jio-bp under-recoveries disclosed for 2Q FY27. Reliance’s operational response will also be measured by its ability to sustain flexible crude sourcing and by Jio-bp’s network of 2,304 outlets, 5,943 charge points and 200 gaseous-fuel stations.