OIL & GAS

Oil cos to strengthen profits even as consumers suffer from rising fuel prices

The oil price rise may be hitting consumers hard, but oil companies are making the most from the current situation, strengthening their margin on the sale of petrol and diesel and jacking up profits.

At the current historic high of fuel price levels in the country, the margin taken by the oil marketing companies (OMCs) on retail sale of petrol and diesel has touched a high of around Rs 3 per litre.

What this means is that while rising fuel prices burn a bigger hole in the consumer’s pocket, the OMCs are increasing their earnings and getting a lift in the current difficult environment created by the Covid-19 pandemic.

According to a research report from ICICI Direct, all oil marketing companies are expected to strengthen their earnings in April-June quarter of FY22 on the back of rising marketing margin and improved gross refining margin. Though profit of companies is expected to fall quarter-on-quarter due to exceptional gains made by some of the companies in the January-March period, as on a YoY basis, they would make more money in Q1.

As per the brokerage report, privatisation-bound BPCL is expected to report net profit of Rs 2,307.7 crore as the company reported exceptional gains of Rs 6,993 crore in Q4FY21.

Source
ET Energy World
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