The monetary efficiency of India’s state-owned refining and advertising and marketing firms will stay weak so long as their web realised costs for petrol and diesel are decrease than worldwide market costs, Moody’s Investor Services mentioned on Monday.
“Nonetheless, we do not expect this situation to be sustained. We expect that the Indian government will eventually allow fuel retailers to adjust selling prices, but the price increases will be implemented gradually,” it mentioned.
Lending help to the federal government’s effort to include inflation, PSUs like Indian Oil Corporation, 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.
Moody’s mentioned regardless of excessive refining margins, refiners or gasoline retailers which are topic to cost ceilings due to authorities insurance policies will reap restricted advantages, with out naming Indian OMCs.
“In the week through 24 June, Asia refining margins, as measured by the Singapore-Dubai hydrocracking margin, averaged at a multiyear high of $39 per barrel. Current margins are close to 20 times the average of around $2 per barrel in 2021. Refining margins are at super-cycle levels because of a shortage of transportation fuels, as demand outpaces supply in Asia,” it mentioned.
Moody’s mentioned the easing of motion restrictions this yr has pushed a powerful restoration in demand for transportation fuels. At the identical time, provide troubles have worsened on worldwide sanctions on Russia that got here after important refinery closures in the course of the pandemic. The mismatch in demand and provide has pushed a surge within the margins of gasoline, gasoil and jet fuels.
Source: www.financialexpress.com”