The gain per barrel of crude oil processed by oil marketing companies (OMCs) is expected to increase in the coming financial year 2022-23 on the back of higher demand according to Moody’s Investor Service. The ratings agency also noted that the lowering of excise duty by the centre in November 2021 had hurt the OMCs.
In a commentary on the refining companies in India, Moody’s said, “We expect earnings for all companies to improve as refining and marketing margins improve. Compared with an average gross refining margin of $0.5-0.7 per barrel (bbl) during 2020 and first half of 2021, we expect the regional refining benchmark to average around $3.0-4.0/bbl over the next 12-18 months, balancing our expectations of demand recovery alongside incoming capacity additions.
