NEW DELHI: Oil Marketing Companies (OMCs) may reduce the price of petrol and diesel in the next few months as the crude price has softened internationally and oil companies have made up their losses, a top official in the Petroleum and Natural Gas Ministry said on Wednesday. He said if the oil companies are in profit in the next quarter too, chances are high that this benefit will pass on to the customer.
“If OMCs have another good quarter, it can be expected that prices can be reduced going forward,” the official added. State-run OMCs — Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) posted cumulative net profit in the past two consecutive quarters.
In the last quarter of FY 2022-23, IOCL reported a consolidated net profit of Rs 10,841.23 crore year-on-year (YoY). Similarly, BPCL posted a profit of Rs 6,780 crore and HPCL too mopped a profit of Rs. 3,608 crore year-on-year in the last quarter of FY 2022-23. In the third quarter too, all three oil marketing companies booked profits of Rs 2964.5 crore.
The companies have also seen record-high gross refining margins (GRMs) in FY23. Private oil companies Rosneft-backed Nayara Energy, India’s largest private fuel retailer, already announced selling petrol and diesel at Re 1 less than the fuel sold by government-owned companies. Similarly, Jio-bp started selling superior grade diesel at Re 1 per litre cheaper than normal or regular grade diesel sold by other companies.
However, state-owned oil marketing companies held the price of petrol and diesel for the past 14 months. The last time fuel prices were revised was in May 2022, when the prices were set at Rs 96.72 and Rs 89.62 per litre, respectively.
According to the Petroleum Planning and Analysis Cell (PPAC), which falls under the Union Petroleum Ministry, crude basket prices came down to $74.85 a barrel in June 2023 (till 8 June 2023) from trading around $100 a barrel a year ago. On windfall tax, the official said if prices go down, as it has now, then it can be abolished. But it can be levied again if required and the Finance Ministry wants.