Even as the West Asia conflict impacted profitability of PSU oil marketing companies (OMCs), Indian Oil Corporation (IOCL) saved ₹2,200 crore in FY26 leveraging Project Sprint — the refiner’s latest strategy to become future ready.
Besides, the country’s largest fuel retailer expects to save ₹2,500 crore leveraging Project Sprint in the current financial year, which ends March 2027, and is expected to be severely mauled by the closure of the Strait of Hormuz (SoH) and reconstruction of damaged oil and gas infrastructure.
Although the latest conflict in West Asia only began on February 28, 2026, the entire FY26 has been marked by sanction actions from the US, the UK and the EU, which kept refiners busy managing cargoes and logistics amid shifting geopolitical narratives.
April-June FY27 will be the first quarter when the full impact of the latest tensions in the middle east gulf (MEG) region will be visible.
During the OMCs FY26 results’ analyst call last week, the company’s management told analysts that IOCL saved around ₹2,200 crore in FY26 through the project and has targeted a saving of ₹2,500 crore in FY27.
“These savings were due to initiatives such as optimum repairs & maintenance expenditure, better energy efficiency parameters, and supply chain optimisation. We are targeting savings of ₹2,500 crore from this initiative as far as capital is concerned,” they added.
Launched on April 1, 2025 and the first major strategic initiative of IOCL Chairman & Managing Director A S Sahney, the initiative focuses on ramping up core capabilities and unlocking new horizons of operational efficiency, high-tech innovation, customer-centricity, sustainable growth and talent development.
It is a confluence of six pillars — S (strengthen core business), P (propel cost optimisation), R (reinforce customer centricity), I (integrate technology and innovation), N (nature leadership and talent) and T (transition ready).
These pillars are anchored on 3Cs (Core, Cost and Customer) as well as 3Ts (Technology, Talent and Transition). It underlines the OMC’s investment in innovation, digitisation and sustainable practices that will shape India’s energy future.
For instance, IndianOil said its targeted revenue expenses increased by a modest 2.5 per cent over FY25, from ₹18,187 crore to ₹18,646 crore in FY26, in spite of increase in scale of business and rising costs due to geopolitical conflict.
Similarly, refineries throughput for FY26 is 75.451 MT with 107.4 per cent capacity utilisation as compared to 71.564 MT in FY25 improving by 5 per cent. IndianOil’s cross country pipelines also achieved combined throughput of 105.556 MT in FY26 as compared to 100.477 MT in FY25 improving by 5 per cent.
The PSU refiner also reported highest ever annual sales volumes of 105.117 MT (FY25: 100.292 MT). In FY26, its domestic petroleum sales volume increased by 4.8 per cent over FY25 as against 4.3 per cent of the industry. Bulk diesel sales volume rose by 21.2 per cent over FY25 as compared to increase in industry volume by 7.2 per cent.
Project Sprint is also an effort by the OMC to claw back its market share. IOCL, which was a market leader in fuel retiling, lost share on marketing to other PSU and private retailers. Since Sahney took over, IOCL has renewed focus on recapturing the market share.
To strengthen its core business, the firm is expanding refining capacity (by 20 per cent) from 80.75 million tonne per annum (MTPA) to 98.4 MTPA by 2028, with major expansions at Panipat, Gujarat and Barauni.
IOCL is also expanding its pipeline network, which includes pipeline extensions and new storage facilities in Nepal.