Diversified crude sourcing helped MRPL navigate geopolitical risks in FY26

The company processed 16.77 million tonnes of crude in FY26 at 111.8% refinery utilisation, improved its gross refining margin to $9.22 per barrel, expanded retail operations and advanced future energy initiatives including sustainable aviation fuel and green hydrogen. | Photo Credit: th-online Administrator

Mangalore Refinery and Petrochemicals Ltd’s (MRPL) initiatives to procure crude from diverse sources and strengthen crude supply security have helped it address situations arising from geopolitical tensions and supply chain disruptions.

MRPL’s annual report for 2025-26 said the company has implemented a multi-layered strategy to ensure uninterrupted refinery operations and strengthen crude supply security and operational resilience, particularly in the context of potential global supply chain disruptions arising from risks around the Strait of Hormuz.

Mentioning that the refinery has the infrastructure to support diversified crude oil sourcing, the report said this ensures no single-point dependency and operational continuity, reducing supply-side risk. MRPL’s crude oil basket comprises 273 different grades sourced from multiple regions worldwide, reflecting its flexibility to process a wide variety of crude oils.

Crudes have been sourced from Asia, South America, Africa, the USA and Russia. Crude was sourced from various national oil companies of exporting countries on a term basis and from the open market on a spot basis.

New crudes

New crudes processed during the year included Hout (Neutral Zone in between Saudi Arabia and Kuwait), Mostarda and Gindungo (Angola), and Sarir Mesla (Libya).

Mentioning that the global crude oil market remained volatile during 2025-26, driven by geopolitical tensions, production decisions by major oil-exporting nations and shifting demand patterns, the report said geopolitical tensions, including conflicts in key regions such as the Persian Gulf and the Russia-Ukraine corridor, along with volatility in freight and insurance markets, continue to pose significant risks to global supply chains.

Critical logistical chokepoints, particularly the Strait of Hormuz, delayed the timely arrival of crude cargoes, potentially impacting operational stability and supply continuity.

The supply disruptions through the Strait of Hormuz have had a direct impact on the supply side, sharply affecting crude oil prices, shipping and logistics, feedstock costs, and inventory management.

“Although our strategic diversification efforts are based on qualitative, quantitative, and commercial assessments, we remain steadfast in our commitment to maintaining a well-balanced sourcing portfolio across both regional and domestic producers. This disciplined approach enhances our ability to capture emerging opportunities while effectively mitigating risks, contingent upon crude availability, quality compatibility, voyage economics, and operational considerations remaining optimally aligned for efficient processing,” the report said.

MRPL has adopted a flexible and responsive crude procurement strategy, underpinned by a judicious blend of long-term contractual arrangements and opportunistic spot purchases. This was complemented by prudent inventory buffers, ensuring seamless continuity and resilience in refining operations.

Performance

MRPL processed 16.774 million tonnes of crude oil in 2025-26, with refinery capacity utilisation at about 111.8 per cent. MRPL said that it has demonstrated operational resilience by operating beyond its rated capacity during periods of global maritime and geopolitical disruptions.

The company also increased LPG production by around 30 per cent to support domestic fuel supply requirements during March 2026.

Gross refining margin (GRM) for 2025-26 was $9.22 a barrel, a significant rebound from $4.45 a barrel in 2024-25, driven by stronger product cracks and a more favourable crude basket.

Supply security

The company said it has strengthened supply security through collaboration with Indian Strategic Petroleum Reserves Ltd to utilise one of its underground crude storage caverns. This enhances crude inventory management and helps mitigate risks arising from geopolitical volatility and shipping disruptions.

To ensure uninterrupted refinery operations, MRPL has invested in robust preventive and predictive maintenance systems, including real-time monitoring of critical equipment and piping using digital sensors.

MRPL continues to focus on strengthening its refining operations, expanding its marketing presence, enhancing value addition and preparing for future energy. India’s long-term energy demand remains strong, it said.

MRPL is actively pursuing initiatives in areas such as bio-ATF, sustainable aviation fuel, green hydrogen, and value-added petrochemical products to build a more diversified and future-ready energy portfolio, it said.

Ethanol blending

During 2025-26, MRPL’s motor spirit production aligned with the nationwide E20 mandate under the Ethanol Blended Petrol (EBP) programme, under which all motor spirit sold in MRPL retail outlets is blended with 19.76 per cent ethanol.

MRPL commissioned 85 retail outlets during 2025-26, bringing the total operational retail outlets to 252. The company has expanded its presence by opening its first retail outlet in Andhra Pradesh. MRPL’s retail footprint now covers outlets in Karnataka, Kerala, Tamil Nadu and Andhra Pradesh.

MRPL sold 343.9 million litres of motor spirit and high-speed diesel at its retail outlets in 2025-26.

--EOM--

Published on July 23, 2026