Oil marketing companies (OMCs) are set for a significant recovery in profitability for FY26, with operating profits expected to increase by more than 50% to Rs. 1,605-1,783 (US$18-20) for each barrel. This enhancement arises from better marketing margins, consistent retail fuel prices, and positive crude oil conditions. Crisil Ratings indicates that gross refining margins (GRMs) are likely to decrease to Rs. 356-535 (US$4-6) per barrel because of slow global demand for fossil fuels during the energy transition. Marketing margins will significantly increase, reaching Rs. 1,248 (US$14) for each barrel. Crude oil prices are expected to decrease to Rs. 5,795-5,974 (UUS$6567) for each barrel. In FY25, OMCs realised operating profits of Rs. 1,069 (US$ 12) per barrel, with GRMs and marketing margins adding Rs. 535 (US$6) per barrel individually, matching the ten-year industry average. The estimated amount in Rs. 1,605-1,783 (US$ 18-20) per barrel signifies a notable increase from FY23's Rs. 11.6 (US$ 0.13) for each barrel when crude averaged Rs. 8,292 (US$ 93) and exceeds FY24's maximum of Rs. 1,783.30 (US$ 20) per barrel when crude was averaged at Rs. 7,400 (US$ 83). The enhanced profitability will lead to cash accruals of Rs. 75,000-80,000 crore (US$8.41-8.97 billion), a significant rise from Rs. 55,000 crore (US$6.17 billion) during FY25. These strong cash flows will support the sector's intended capital spending of Rs. 90,000 crore (US$10.09 billion), mainly focused on brownfield development and projects driven by domestic demand. As a result, leverage metrics are anticipated to eimprove with the debt-to-EBITDA ratio projected to decline to 2.2x from 3.6x in the year prior. As capital expenditure growth persists, stronger earnings will lessen the dependence on external debt. Credit profiles continue to be supported by the sector's crucial national significance and government control.