Despite fuel price cuts due to Covid-19, OMCs improve net marketing margins
Covid-19 pushed demand squeeze and fall in product prices, including that of fuel is unlikely to impact the profitability of oil marketing companies in the country as their net marketing margin on auto fuel is expected to surge in coming fortnight with expectation that it may remain at elevated levels for rest of the year, analysts tracking the sector said.
The net marketing margin of OMCs on sale of petrol and diesel has increased to Rs 4 per litre by mid-September from Rs 2.23 per litre earlier as there has been correction in global auto fuel prices.
“This rise is likely despite cut in retail price of petrol and diesel by Rs 0.53-1.0/l since 5-Sep 20. Net margin would be Rs 4.39/l on 16-Sep’20 and Rs 5.01/l on 1-Oct if retail prices are not cut further,” ICICI Securities said in a report.
