Hindustan Petroleum Corporation Limited (HPCL) is looking for crude oil prices to stabilise before considering reducing fuel prices in the domestic market, the management said in a conference call post results on January 25.
The current crude market is highly volatile for HPCL to reduce fuel prices, said the Chairman and Managing Director Pushp Kumar Joshi.
The state-run oil marketing company posted a 207 percent standalone growth, or over a three-fold jump, in profit at Rs 529 crore for the December quarter of fiscal 2023-24 as against Rs 172 crore reported a year back.
“We are looking at more stable environment where price fluctuations normalise. Currently, one day (crude) prices are going down by $5 per barrel and another day they are jumping up. In this environment, it is not right to pass on or reduce prices on daily basis,” said Joshi.
Indian fuel retailers have left retail prices of fuel unchanged since April 2022 despite correction in crude oil prices. Typically, OMCs – Indian Oil Corporation Ltd (IOCL), BPCL and HPCL revise retail petrol and diesel prices daily, based on the rolling average of international benchmark prices over the past 15 days.
While the international crude oil prices have cooled down significantly are currently trading below $80 per barrel, the OMCs have not revised prices as they incurred huge losses when crude prices had skyrocketed.
Red Sea disruption
Crude oil prices have not been impacted by the disruptions in the Red Sea, which accounts for 10 percent of the world's oil, grain, and consumer goods shipments, said HPCL management.
HPCL has already tied up for the company’s crude oil requirements until the end of this financial year, i.e. March 2024, Kumar told analysts on the conference call.
“For crude, we have not seen disruptions as of now. This (Red sea crisis) is definitely affecting the freight costs. As far as supply is concerned, I am confident that supply requirement is being met. We will have to see how this situation unfolds in the next few weeks,” said Kumar.
Despite disruptions in the Red Sea, international crude oil prices have remained low due to weak demand and strong dollar.
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