Refining remains weak, but worries ease on marketing; we remain optimistic on divestment prospects in FY22F. Compared to infrequent\/delayed retail petrol\/diesel price changes in 2020, oil marketing companies (OMCs) have taken daily price increases recently. Despite peak prices, inflation concerns, threat of strikes by transporters, and negative press, price hikes were sustained. So far in 2021, petrol\/diesel prices are up ~\u20b97.2\/7.5\/L (9-10%, ~$16\/bbl) and LPG prices are up \u20b9100\/cylinder (+14%).<\/p>\n
On our estimates, retail prices are now factoring in international product price of $64-65\/bbl. We see downside risk to oil prices (we assume $55\/bbl for FY22F), and product margins remain weak. Upcoming state elections are a risk. But we note there is scope of excise duty cuts. In our view, risk\/ reward is a lot more favourable now for marketing. However, refineries are still going through one of the most severe down-cycles, with recovery delayed due to a second wave of the pandemic, and near-term outlook is weak.<\/p>\n
Divestment, delays and lukewarm interest, still looks likely to complete in FY22F; BPCL\u2019s divestment, initially planned for FY20, has been delayed. Investor interest has also been lukewarm.<\/p>\n","protected":false},"excerpt":{"rendered":"
Refining remains weak, but worries ease on marketing; we remain optimistic on divestment prospects in FY22F. Compared to infrequent\/delayed retail petrol\/diesel price changes in 2020, oil marketing companies (OMCs) have taken daily price increases recently. Despite peak prices, inflation concerns, threat of strikes by transporters, and negative press, price hikes were sustained. So far in 2021, petrol\/diesel prices are up ~\u20b97.2\/7.5\/L (9-10%, ~$16\/bbl) and LPG prices are up \u20b9100\/cylinder (+14%). On our estimates, retail prices are now factoring in international product price of $64-65\/bbl. We see downside risk to oil prices (we assume $55\/bbl for FY22F), and product margins remain […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[130,195,138],"tags":[],"class_list":["post-402940","post","type-post","status-publish","format-standard","hentry","category-newspapers","category-oil-gas-the-financial-express","category-the-financial-express"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/402940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=402940"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/402940\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=402940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=402940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=402940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}