Petrol and diesel prices may rise further as India's oil marketing companies face mounting losses. Energy analyst Yogesh Patil from Dolat Capital states the recent Rs 3 per litre fuel price hike is only a modest step toward stabilizing OMC profitability. With crude oil prices elevated around $110 per barrel, Patil calculates an additional Rs 11 per litre increase is needed to fully eliminate under-recoveries on fuel sales. The latest revision could reduce daily losses by approximately Rs 141 crore and provide temporary working capital relief. However, the government faces pressure balancing consumer inflation concerns with protecting oil retailers' financial health. Market participants view the hike as a signal toward eventual deregulated fuel pricing, which could ease concerns about eroding book value and rising short-term debt dependence among state-run fuel retailers.
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