How much can Jio-bp’s 35% fuel sales surge shield Reliance Industries from crude oil volatility this year?

Reliance BP Mobility Limited, operating under the Jio-bp brand, delivered a strong performance in Q1 FY26, with transportation fuel volumes rising sharply by 35% year-on-year, according to Reliance Industries Limited’s July 18, 2025 quarterly update. The fuel retail network now comprises 1,991 outlets, up from 1,730 a year ago, reflecting Reliance Industries’ aggressive push into domestic mobility solutions. This surge in retail fuel sales contributed to a 10.8% year-on-year increase in oil-to-chemicals (O2C) EBITDA to ₹14,511 crore, even as segment revenue fell 1.5% due to weaker crude prices and a planned maintenance shutdown.

The robust domestic sales underline Jio-bp’s growing importance as a stabilizing earnings lever at a time when global crude volatility and declining export volumes continue to pressure Reliance Industries’ energy business.

Can higher domestic fuel retail margins through Jio-bp consistently offset weak crude prices and lower export volumes in fy26?

The O2C business has long been exposed to fluctuations in global crude benchmarks, which averaged $67.8 per barrel in Q1 FY26, down 20% year-on-year due to OPEC+ production cuts and demand-side uncertainty. However, Jio-bp’s performance is helping to partially mitigate these headwinds by boosting domestic realisations. According to Reliance Industries’ filing, high-speed diesel sales rose 34.2% while motor spirit volumes grew 38.6%, significantly outpacing the overall industry, where diesel volumes contracted 1.3% and petrol rose only 7.1%.

This strong demand coincided with higher downstream fuel margins. Singapore gasoline cracks rose to $9.9 per barrel in Q1 FY26 from $8.5 a year earlier, and gasoil cracks improved to $15.8 per barrel, supporting profitability. Jio-bp’s “International Fuel for India” campaign, which promotes higher-mileage diesel and premium petrol at competitive pricing, has been credited for winning market share from state-owned oil marketing companies. Analysts suggest that this strategy, combined with Reliance Industries’ scale and supply chain efficiency, is giving the retail segment a distinct cost and margin advantage.

Domestic retail sales also provide a cushion against export-related revenue swings. In Q1 FY26, Reliance Industries’ exports from the O2C segment fell 17.1% year-on-year to ₹59,245 crore, partly due to planned maintenance that reduced throughput to 19.1 million metric tons. By prioritizing domestic fuel placement through Jio-bp, the company was able to partially offset the impact of lower international sales, ensuring steadier cash flows despite global price volatility.

Jio-bp is also expanding into adjacent mobility segments to capture future demand. Its electric vehicle charging network, Jio-bp Pulse, scaled to 6,292 live charging points across 840 sites, maintaining industry-leading uptime levels. Under its Clean N Green initiative, the network added 100 compressed biogas (CBG) sites, sourcing gas from Reliance Industries’ own digestors. While these segments contribute minimally to EBITDA currently, they align with the company’s long-term transition toward lower-carbon fuels and enhance its positioning in India’s evolving mobility landscape.

Market observers highlight that structural demand for transportation fuels in India remains strong, supported by growing freight movement, rising private vehicle ownership, and broader economic expansion. This underlying demand strength provides Reliance Industries with a reliable domestic outlet for its refined products, reducing dependence on price-sensitive global markets.

Despite these positives, complete insulation from crude price volatility remains unlikely. Feedstock costs and petrochemical spreads continue to influence overall O2C earnings. Polymer margins showed mixed trends in Q1 FY26, with polypropylene spreads improving to $360 per metric ton while polyester chain margins fell to $446 per metric ton due to weak paraxylene demand and soft beverage-sector consumption. Analysts caution that if crude prices remain depressed for an extended period, margin gains from retail fuel sales alone may not fully offset declines in export-linked refining and petrochemical segments.

Looking ahead, analysts believe Jio-bp’s retail expansion will play an increasingly strategic role in stabilizing Reliance Industries’ O2C business. If the network surpasses 2,000 outlets in the coming quarters and continues to post above-industry growth rates, Reliance Industries could achieve a more diversified earnings mix, reducing its traditional dependence on export-oriented refining cycles. While it may not fully hedge against global crude swings, Jio-bp’s rising contribution positions Reliance Industries better than peers that rely primarily on international markets for downstream revenues.