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OMCs Face Continued Losses on Petrol and Diesel Despite Lower Crude Prices
Sentiment: NeutralHigh Priority
What Happened?
Oil marketing companies (OMCs) are still incurring losses on petrol and diesel sales, though losses have decreased with falling crude oil prices, according to Jefferies. Current losses are Rs 12 per litre for petrol and Rs 27 per litre for diesel.
Key points
- Marketing losses on petrol have decreased to Rs 12 per litre from Rs 22 in October.
- Diesel losses have reduced to Rs 27 per litre from Rs 28 in October.
- The Indian crude basket price has fallen to $97 per barrel from $120 in October.
- Despite reduced losses, marketing margins for both fuels remain negative.
- Global crude supply has improved, with Middle East exports returning to pre-war levels.
- Freight rates remain high, impacting the oil market.
Key insights
- Continued negative margins may lead to further financial strain on OMCs.
- High freight rates could hinder the recovery of the oil market.
- Improved crude supply may not fully alleviate the financial pressures faced by OMCs.
Why it matters
The ongoing losses for OMCs could affect fuel pricing and availability for consumers.
Source
Times of India
