Even after factoring in the Rs 3 per litre hike in petrol and diesel prices, the Oil Marketing Companies to incur losses of around Rs 500 crore per day with anticipation of few more price hikes soon. Petrol price was hiked to Rs 97.77 per litre from Rs 94.77 in the national capital. Diesel now costs Rs 90.67 as against Rs 89.67 per litre previously. The increase has pushed fuel prices above Rs 100 per litre in several cities like Mumbai, Kolkata, and Chennai.
Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings. ICRA Ltd. said, "The modest hike in retail price of Rs. 3/liter for petrol and diesel provides limited relief to the oil marketing companies."
"ICRA estimates that at crude price of $105-110/barrel and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about Rs 500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike. Accordingly the oil marketing companies would need to relook at the retail prices in case elevated crude oil prices persist."
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "The Rs 3 hike in petrol and diesel prices reflects the pressure of elevated global crude oil prices and rising import costs on the government’s fiscal position. While the increase may temporarily add to inflation concerns and impact transportation and consumption costs, it also indicates the government’s focus on managing fuel subsidies and protecting forex reserves amid ongoing global uncertainty. In the longer term, such moves may further accelerate the push towards EV adoption and reduced dependence on imported fuel."
Vikas Kumar is Deputy Editor (Business) at Times Now driving coverage across policy, economy and markets. He possesses nearly a decade of experience i...View More
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