Petrol and diesel prices could be cut marginally after more than a year following profits reported by oil marketing companies (OMCs) in the fourth quarter of FY23 as the global crude prices softened.
However, motorists would wait to see the first quarterly performance of the current fiscal before they pass on the benefits.
The state-owned oil firms are studying the likely impact on their financials following Saudi Arabia’s decision to cut production and also hike the official selling price for July shipments.
A senior petroleum ministry official 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 profits 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 2,964.5 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.
Petrol and diesel prices have remained unchanged since May 22 last year. The government had cut the excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 a litre, days after the RBI had then hiked the interest rates by 40 basis points.