Oil Ministry expects oil marketing companies to lower fuel prices, as crude prices decrease

The government expects oil marketing companies (OMCs) to cut fuel prices as global oil price decline and after the oil majors reported profits in the fourth quarter of the fiscal year 2022–23, Money Control reported through sources.

The March quarter saw significant gains for the state-run OMCs Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), due to a drop in crude prices.

IOCL recorded a standalone net profit of ₹8,242 crore for FY23, a decline from ₹24,184 crore last year, despite making money in Q4FY23. A similar reduction in standalone net profit was also reported by BPCL for FY23.

HPCL, on the other hand, posted a standalone net loss for FY23 of ₹8,974 crore.

Due to concerns about inflation and the recession, crude prices have fallen in recent months and have been steady at $75 per barrel. In March 2022, the price of crude reached an all-time high of $140 a barrel.

OMCs have not reduced the price of petrol and diesel despite the drop in order to make up for losses sustained in the first half of FY23.

Analysts anticipate that OMCs will profit from a strengthening marketing environment and strong refining profitability in the current fiscal year, as reported by Money Control.