Revisions in fuel retail price come as a relief for oil marketing companies

After a 12-week pause, state-owned oil marketing companies (OMCs) started revising auto fuel prices on a daily basis this week. OMCs include Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL) and Indian Oil Corp. Ltd (IOC). The increase in retail prices comes as a relief to OMCs, as estimated marketing margins were quite low recently. In fact, price hikes were the need of the hour.

As Amit Shah, head of research at BNP Paribas India, points out, “In our view, daily price revisions had to resume sooner than later. It doesn’t make sense for OMCs to absorb higher oil prices (like it did in 2018), especially given the plan to divest BPCL, which remains a priority amid the current fiscal situation.”