Petrol And Diesel Price Could Be Increased By Up To Rs. 5.5/Lt To Maintain FY20 Margins

As the assembly elections are almost over, state run oil retailing compaies would want to raise the auto fuel price to make up for the rising global crude and product prices. This is to improve on their marketing margins.

Petrol And Diesel Price Could Be Increased By Up To Rs. 5.5/Lt To Maintain FY20 Margins

"With the state elections now over, we expect OMCs to resume retail price increase for auto fuel," analysts at Credit Suisse said in a recent note, adding that "OMCs need to increase retail prices for diesel by Rs 2.8-3/litre and gasoline (petrol) by Rs 5.5/litre to maintain their FY20 margins.

On Friday, retail petrol price in Delhi was Rs 90.40/litre, after rates were constantly declining from March after having hit a high of Rs. 91.17 per litre. Since January price of petrol has seen a rise of 8 percent, while the cost of Indian basket of crude grew by 24.2 percent to $64.51 per barrel. The marketing margin of just Rs. 3 in respect of diesel has been the lowest experienced by the oil marketinng retailers in nine quarters.

Also, there has been pointed out by global research firm Jefferies that inadequate price hike on account of elections will impact the privatisation of BPCL.

Now amid the Covid 19 pandemic raging in all its intensity and localised there has again a hit on auto fuel marketing volume. The impact has been worst in Maharashtra while Uttar Pradesh, New Delhi, and Chhattisgarh have also been severely affected.