ICRA: Improved Marketing Margins for Indian Oil Marketing Companies Amid Recent Crude Price Reduction
Fuel Price Cut Expected Soon as ICRA Reports Improved Marketing Margins for Indian Oil Marketing Companies
Girishkumar Kadam, Senior Vice President and Group Head, Corporate Ratings at ICRA Ltd, stated that as of January 19, 2024, Indian Oil Marketing Companies (OMCs) had a net realization higher by Rs 11/litre for petrol and Rs 6/litre for diesel compared to international product prices.
The retail prices of petrol and diesel have remained constant since May 2022.
ICRA observed an improvement in marketing margins for petrol in recent months after a decline in September 2023. Diesel margins, initially negative until October 2023, turned positive from November 2023. Despite no changes in retail selling prices since May 2022, there might be room for a downward revision if crude prices remain stable.
ICRA suggests that the improved margins may lead to a potential reduction in retail fuel prices, contingent on the stability of crude prices. Current benchmark crude prices, below $80 per barrel, reflect subdued demand and increased production in Libya and Norway, mitigating concerns over potential conflicts in West Asia.
Petrol and diesel prices have remained unchanged since May 2022. The Special Additional Excise Duty (SAED) on petroleum products, initially imposed in July 2022, has seen multiple revisions. In the latest update on January 1, 2024, SAED was reduced to nil on diesel and ATF, and remained nil on petrol.
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