← Business Metric: Industry Specific (Industrials & Materials) (all topics)
Spread - refining (gross refining margin)
What it is
The difference between the value of products a refinery makes and the cost of the crude it processes, expressed in dollars per barrel. It is the core profitability measure in refining and moves with product cracks, crude differentials and refinery configuration
Indian OMC GRMs fell from $10-12/bbl in FY24 to about $4-6 in FY25 on cycle normalisation, then held up in FY26 largely on discounted Russian crude
Impact on industries
- Complexity pays - refineries configured for heavier, higher-sulphur crude capture wider differentials than simple refineries processing light sweet grades
- Almost entirely externally determined: crude prices, product cracks and freight are set globally, so a refiner controls only throughput, configuration and sourcing
- Middle-distillate cracks drive the cycle, and their weakness was the main cause of the FY25 halving rather than anything refinery-specific
- Indian GRMs decoupled from regional benchmarks while Russian discounts were wide, so headline GRM has recently measured sourcing advantage as much as refining skill