The government expects oil marketing companies (OMCs) to cut fuel prices after the fuel giants reported profits in the fourth quarter of the financial year 2022-23, a senior petroleum ministry official has said.
The OMCs were expected to pass on the benefits to the consumers as their performance was now “close to normalcy”, the official said.
State-run OMCs—Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL)—booked large profits in the March quarter, helped by a decline in crude prices. The official said that the oil marketers were also expected to have a good next quarter (Q1FY24) as well.
Despite posting profits in Q4FY23, IOCL reported a standalone net profit of Rs 8,242 crore for FY23, a decline from Rs 24,184 crore in the previous year. Similarly, BPCL also reported a decline in standalone net profit in FY23.
On the other hand, HPCL reported a standalone net loss of Rs 8,974 crore in FY23.
Crude prices have declined in the last few months amid inflation and recession worries and have hovered around $75 a barrel. Crude prices touched an all-time high of $140 per barrel in March 2022.
Despite the decline, OMCs have not revised petrol and diesel prices to recoup losses incurred in the first half of FY23.
Analysts expect OMCs to benefit from an improving marketing situation and healthy refining profitability in the current financial year.
For FY24, analysts anticipate better marketing margins for OMCs amid range-bound crude oil prices due to global recessionary pressure and high interest rates.
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