Fuel demand boosts oil marketing companies’ petroleum product sales: Fitch Ratings

NEW DELHI: Transportation fuel demand shows signs of improving to pre-pandemic levels from FY23 as visible from petroleum product sales for the OMCs (oil marketing companies) which increased between 8 per cent-11 per cent during the nine months ended December of fiscal 2021-22 from a year earlier as demand rebounded from a pandemic-induced fall.
However, demand was still 5 per cent – 7 per cent below pre-pandemic levels in 9MFY20. Fitch Ratings is of the view that OMCs will generate steady marketing margins in FY23 as they continue to pass on changes in crude oil prices to consumers, a Fitch Ratings study showed on Tuesday.
However, record high retail-fuel prices may limit the extent to which the changes are passed on, should crude oil prices continue to rise.