Fuel prices steady for last 7 months: How much profit or loss oil firms are making per litre petrol, diesel

Oil marketing companies (OMCs) Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not changed prices of petrol and diesel for the last seven months despite changes, both upward and downward, in global crude oil prices. So the question comes — How are these OMCs keeping the prices steady despite gyrations in global crude oil market?

OMCs are making a profit of Rs 10 per litre but retail prices haven’t been cut as they look to recover past losses and make up for a Rs 6.5 a litre loss they are incurring on diesel

IOC, BPCL and HPCL have for the last seven months not revised petrol and diesel prices and they continue to recoup losses incurred when rates were high in the global crude market.

“Post record high losses of Rs 17.4 per litre on petrol and Rs 27.7 a litre diesel for the week ended June 24, 2022, margins for petrol are estimated at a positive Rs 10 per litre for Q3 (October-December 2022) while diesel losses too have likely narrowed to Rs 6.5 a litre for the same quarter,” ICICI Securities said in a report.

The fuel retailers haven’t changed petrol and diesel prices since April 6, 2022. Input crude oil prices have rises from USD 102.97 per barrel that month to USD 116.01 in June and falling to USD 78.09 this month, as per the report.

The three firms as they had to hold prices when input cost was higher than retail selling prices saw them post net earnings loss. Together they posted a combined net loss of Rs Rs 21,201.18 crore during the first half of the ongoing fiscal.

“Coupled with gross refining margins (GRMs) of USD 10.5-12.4 per barrel (net of windfall tax and estimated inventory loss), we do believe operating earnings for the three companies will likely swing back to the black post the record loss seen in Q2,” ICICI Securities said.

The report estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 2,400 crore for IOC in the October-December quarter, Rs 1,800 crore for BPCL and Rs 800 crore for HPCL. But the three fuel retailers may end up posting net losses — with IOC staring at a net loss of Rs 1,300 crore, HPCL Rs 600 crore loss and BPCL may break even.

International oil prices have seen wild movements, upward and downward both, in the last couple of years. It was in the negative zone at the start of the pandemic in 2020 and swung wildly in 2022. The benchmark crude in the international market climbed to a 14-year high of nearly USD 140 per barrel in March 2022 in the wake of Russia-Ukraine war.




India’s 85 percent fuel requirement is met through imports, and the spike in prices internationally meant worsening inflation and derailing the economic recovery.

Considering these, state-owned oil firms froze petrol and diesel prices for the longest duration in at least two decades.

The oil ministry is pushing for compensation to the fuel retailers so that they make up for the losses incurred.


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