New Delhi
Oil Marketing Companies have lost around $2.25 billion in revenues from 5th November to 21st March, the period when they stopped revising fuel prices despite high crude prices in the international market.
As per a study by Moody’s Investors Service, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) are incurring around $70 million in daily losses on petrol and diesel sales.
“Based on our estimates of average sales volume between November and first three weeks of March, the state-owned refining and marketing companies together have lost around $2.25 billion in revenue on petrol and diesel sales. This equates to around 20% of the combined FY2021 EBITDA for the three entities,” reads the report.
The price of petrol and diesel was on halt between 4th November 2021 and 21 March 2022 in the country despite high crude prices in the International market. During this period, the Brent Crude Future, the benchmark of global crude price, even touched the highest $139 per barrel on 7 March 2022.
The prices were revised by the Indian fuel retailers on both diesel and petrol by 80 paisa per litre on 21st March and by the same amount again on 22nd March. As per Moody’s investors’ study, if crude oil prices continue to average around $111 per barrel, the three rated entities – IOCL, BPCL and HPCL will incur a combined daily loss of around $65 million-$70 million on the sale of petrol and diesel unless fuel prices are increased to cover the rising crude oil prices.
