Margins on petrol and diesel have turned positive after softening international oil prices, but revision in retail prices can happen only after state-owned oil companies make up for losses incurred last year, officials said. State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have temporarily given up daily price revision since last year and have revised the prices of petrol and diesel in line with the cost. not amended. And the losses incurred when oil prices were higher than retail selling prices are now being compensated with a fall in rates.
Indian companies have been making positive margins on petrol since October last year
Officials said all the three companies have been making positive margins on petrol from the fourth quarter of 2022 calendar year, but diesel, which forms the bulk of fuel sales, remained in the red. But last month, the margin on diesel turned positive with a small profit of 50 paise per litre, he said, however, it was not enough to make up for the previous losses.
International oil prices reached $139 per barrel in March 2022 following the Russia-Ukraine war. They have since cooled down to USD 75-76. At the peak, oil companies lost Rs 17.4 per liter on petrol and Rs 27.7 per liter on diesel. In the October-December quarter, oil companies earned a margin of Rs 10 per liter on petrol, but lost Rs 6.5 on diesel. In the next quarter, the margin on petrol declined to Rs 6.8 per litre, while diesel earned Rs 0.5 per litre. Officials said that apart from past losses, oil companies would also like to see whether the fall in oil prices is sustained or not.
“I think they will keep a watch on prices for one more quarter (April to June) before deciding to resume revision of fuel prices,” said an official. When the holding price was higher than the input cost retail selling price, all the three firms suffered net earning losses. They posted a combined net loss of Rs 21,201.18 crore during April-September despite declaring Rs 22,000 crore as non-payment of LPG subsidy.
Why didn’t India reduce oil prices despite buying oil at half the price?
International oil prices have been turbulent over the past few years. It fell into negative territory in 2020 at the start of the pandemic and swung wildly in 2022 – before sliding on weak demand from top importers to around USD 140 a barrel in March 2022 after Russia invaded Ukraine. climbed to year’s high. China and the worry of economic contraction. But for a nation that is 85 per cent dependent on imports, the spike means adding to already rising inflation and derailing the economic recovery from the pandemic. Hence, the three fuel retailers, which control nearly 90 per cent of the market, slashed petrol and diesel prices for the longest period in at least two decades.
He stopped the daily price revision in early November 2021, when rates across the country hit an all-time high, prompting the government to roll back a portion of excise duty hikes during the pandemic to take advantage of lower oil prices. Inspired to The freeze continued into 2022, but a war-led spike in international oil prices saw petrol and diesel prices hiked by Rs 10 a liter from mid-March, before another round of excise duty cuts by all but Rs 13. 16 per liter and came back Rs. Per liter increase in taxes on petrol and diesel with effect during the pandemic. Thereafter, starting from April 6, the current price stabilized, which is still continuing.
(With inputs from PTI)
ALSO READ: Oil prices jump nearly 6% after OPEC+ cuts production