Petrol, Diesel Prices Likely To Be Cut By Rs 5-10 A Litre Next Month After Q3 Results By Oil Firms: Report

Government-owned oil marketing companies (OMCs) may consider reducing prices of petrol and diesel by Rs 5-Rs 10 next month after they announce Q3 FY24 results, according to a Hindustan Times report citing three people aware of the matter. The OMCs are likely to cross a record Rs 75,000 crore in their combined net profit amid lower costs of acquiring crude oil.

Three state-owned fuel retailers — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — which control roughly 90 per cent of the market, have kept petrol and diesel prices on freeze for a record 21 months in a row.

According to the HT report citing the sources, OMCs are sitting on margins of Rs 10 per litre that can be passed on to consumers.

“Due to higher marketing margin on the sale of fuels, the three OMCs (oil marketing companies) posted significant net profit in Q1 and Q2 [of FY2023-24] and the trend will continue in Q3. After results by the end of this month, they may consider reducing petrol and diesel rates between Rs 5 and Rs 10 a litre, keeping some cushion for future spike in international oil prices. A decision will be taken by the companies in consultations with their stakeholders,” the report quoted one of the people saying so.

In the first half of the current financial year 2023-24, the combined net profit of three OMCs stood at Rs 57,091.87 crore, which is a jump of over 4,917 per cent as compared with a combined net profit of Rs 1,137.89 crore in the entire 2022-23.

HPCL will declare its Q3 financial results on January 27, while BPCL and IOC are also expected to announce the earnings around the same time.

Currently, petrol in Delhi is being sold at Rs 96.72 a litre while diesel is being sold at Rs 89.62 a litre. Whereas in Mumbai, petrol is available at Rs 106.31 and diesel at Rs 94.27 per litre. While petrol in Kolkata is Rs 106.03 and diesel is Rs 92.76 per litre. On the other hand, petrol is being sold at Rs 102.63 and diesel at Rs 94.24 per litre in Chennai.