The freeze on retail promoting costs for auto gasoline and LPG amid hovering commodity costs has led consolidated built-in auto-fuel margins for Indian oil advertising and marketing firms (OMCs) to a adverse Rs 2-3/litre now, in contrast with the normative run price of optimistic Rs 8-9/litre, brokerage agency Emkay Global Financial Services stated.
“The Q1FY23 average is estimated to be a positive Rs 4-6/litre. LPG under-recoveries for Q1FY23 would also average at around Rs 300/cylinder, but a seasonal cut in Aramco June LPG has lowered the same to around Rs 100/cylinder for Jul’22,” stated Sabri Hazarika, analyst of Emkay in a report.
The brokerage agency estimates adjusted under-recoveries of Rs 14,100 crore in auto-fuel and Rs 12,500 crore in LPG for the primary quarter of the present fiscal. The present under-recovery run price signifies an annualised hit of Rs 2 trillion that features LPG and therefore, retail promoting worth hikes are important except the Centre rolls again the deregulation itself.
“The continuing price freeze without any indication is worrying, though looking at past instances and the magnitude of current losses, we expect some solution in the form of a resumption of price hikes and/or subsidies,” Hazarika stated.
Lending help to the federal government’s effort to include inflation, PSUs like Indian Oil, Hindustan Petroleum and Bharat Petroleum have saved retail gasoline costs on maintain since May 22. The retail worth of diesel and petrol in Delhi stands at Rs 89.62 and Rs 96.72 per litre respectively.
Source: www.financialexpress.com”