Gains from the marketing segment helped state-run oil marketing companies (OMCs) including Bharat Petroleum Corp. Ltd, Hindustan Petroleum Corp. Ltd and Indian Oil Corp. Ltd make up for the muted performance of the refining segment in the March quarter.
Marketing margins of OMCs for the March quarter were higher than expected, as these companies had not passed on the drop in product prices to customers, pointed out analysts from Nomura Financial Advisory and Securities (India) Pvt. Ltd.
But the good news could well end there on the marketing segment, especially since oil prices have now risen. “As OMCs have not taken the required price increases with increased oil/product prices, marketing margins seem to have declined in 1QFY20F,” wrote Nomura analysts in a report on 21 May.
