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Fuel Retailers Losing Billions as Oil Prices Surge to $100 Per Barrel
Confirmed
In Short: Public sector fuel retailers in India are facing significant financial losses, with marketing margins on petrol and diesel becoming negative as global crude oil prices rise to $100 per barrel.
With the recent escalation in the West Asia conflict, global crude oil prices have surged, pushing the Indian crude basket to around $109 per barrel. This has resulted in public sector oil marketing companies (OMCs) incurring heavy losses, with marketing margins on petrol and diesel becoming negative.
The losses have widened again amid the recent spurt in global prices, despite the OMCs only partially passing on the international price increases to retail consumers. Retail petrol and diesel prices have not changed for over three months, with the last revision in May by a total of Rs 7.35 per litre for petrol and Rs 7.53 per litre for diesel.
These financial pressures come as the OMCs continue to incur losses on retail fuel sales, despite recent price hikes. The situation is expected to increase pressure on the OMC finances, especially as the conflict in West Asia shows no signs of abating.
What's still developing
- “With escalation in hostilities between Iran and the US, Brent prices have crossed the $100/barrel mark today and the Indian crude basket is at around $109/barrel. At the average price for the month of September till date, marketing margins on petrol are negative Rs 5/litre and diesel at negative Rs 23/litre, and under recoveries on domestic LPG are at Rs. 200/cylinder,”said Prashant Vasisht, senior vice president and co-group head, corporate ratings at ICRA.
- If you're looking for a seasonal refresh, big-box retailers are offering huge discounts across almost every category.
- We won't see discounts this big again until Black Friday, so now's the time to act — especially with tech and appliance prices continuing to climb.