price of gasoline and diesel
Although the inflation rate in the country is less than 4 per cent, the rising prices of petrol and diesel continue to empty the pockets of common people. This too when the price of crude oil in the international market is less than $72 per barrel. The country’s government oil companies directly benefit from this. As crude oil prices fall, corporate coffers appear to be filling with profits.
By mid-March, oil companies had reduced the price of petrol and diesel by Rs 2 per litre. After that no change in prices has been seen. The special thing is that at that time the price of Brent crude oil exceeded $85 per barrel. Since then, crude oil prices have dropped $14 per barrel, but gasoline and diesel prices have not changed. Let us also try to explain to them, based on statistics, how oil companies fill their coffers without giving them to ordinary people.
how much profit is being obtained?
Government oil companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) are making profits of Rs 15 per liter on petrol and Rs 12 per liter on diesel. According to the recent ICRA report, there has been a significant increase due to the fall in crude oil prices. Girishkumar Kadam, Senior Vice President and Group Head – Corporate Ratings, ICRA, said that ICRA estimates that compared to the international commodity price in September 2024 (as of September 17), oil companies will make a net profit of Rs 15 per liter of gasoline. and 12 rupees were observed in diesel. There has been no change in these fuels since March 2024. On March 15, 2024, a cut of Rs 2 per liter was made on petrol and diesel.
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Gasoline and diesel are expensive now
Iqra said the recent reduction in crude oil prices has improved marketing margins in retail sales of automobile fuel for oil marketing companies. Fuel prices in India have remained high for the past few years, with petrol still above Rs 100 per liter in many states and diesel above Rs 90 per litre. These prices have a direct impact on inflation, which affects everything from transportation to aviation and even daily needs like cooking.
The companies had made so many profits
OMC’s financial performance for the 2023-24 financial year has been excellent, with profits far exceeding the disappointing results of the previous financial year. The Ministry of Petroleum and Natural Gas has recently confirmed that the combined profit of state OMCs amounts to Rs 86,000 crore, 25 times more than last year.
HPCL made a record profit of Rs 16,014 crore last financial year, which is in stark contrast to its loss of Rs 6,980 crore in the financial year 2022-23. BPCL’s profit after tax was Rs 26,673 crore, almost 13 times more than last year, while IOC also made huge profits.
Despite these promising financial conditions, Indian consumers are yet to see any significant reduction in fuel prices, even as international crude oil prices have fallen to their lowest level in three years. Experts say OMCs now have scope to reduce prices, which could potentially provide some relief to consumers ahead of the upcoming state elections in Maharashtra and Haryana.
Increased marketing margin
Crude oil price has a direct impact on the profitability of fuel retailers, especially OMCs that control around 90 per cent of India’s fuel retail market. As crude oil prices have fallen in the international market, these companies have managed to increase their marketing margins. The ICRA report shows that OMC trading margins have improved significantly in recent weeks due to falling crude oil prices.
This was the statement from the ministry
Earlier this month, Ministry of Petroleum and Natural Gas Secretary Pankaj Jain had told oil marketing companies that if crude oil prices remain low for a long time, then reducing fuel prices may be considered. . However, the general public is skeptical because the previous decline in global oil prices has not resulted in a significant reduction in fuel prices in India. For the full financial year 2023-24, Hindustan Petroleum Corporation Limited (HPCL) posted a record profit of Rs 16,014 crore, a significant turnaround from the previous year’s loss of Rs 6,980 crore.
