India’s public sector oil marketing companies (OMCs) could consider lowering petrol and diesel prices by ₹5-10 per litre next month, after they announce record profits in third quarter earnings reports.
Q3 Net Profit May Top ₹75,000 Crore
According to official sources, IOC, BPCL and HPCL together are expected to report net profits above ₹75,000 crore in Oct-Dec 2022 period.
This is underpinned by higher marketing margins on fuel sales as well as softening crude oil costs. In first half itself, their combined net profit had spiked to ₹57,091 crore from just ₹1,137 crore in entire FY23.
The strong earnings performance will continue in third quarter as well based on elevated refining margins.
Potential ₹10/Litre Fuel Price Cut
With such high profits and margins at around ₹10 per litre, officials say companies will re-evaluate passing on some benefits to consumers after quarterly number announcements.
Sources reveal OMCs could reduce petrol and diesel rates by ₹5-10 per litre through February, while keeping buffers for any future oil price volatility.
The decision is expected to be taken in consultation with government which is the majority stakeholder.
Election, Inflation Considerations
A significant cut in retail fuel prices ahead of 2024 general elections could provide some relief from persistently high inflation.
It may also stimulate consumption and economic growth amid signs of slowdown in recent quarters.
For OMCs who froze pump prices since April 2022 despite higher input crude costs, it is an opportunity to win back consumers while pocketing solid marketing margins this year.
All eyes are now on Q3 results of IOC, BPCL and HPCL expected around end of this month for further cues and price movement triggers.
