Oil companies may reduce fuel prices next mth

State-run oil companies could consider reducing the prices of petrol and diesel next month after they release their third quarter results, which are likely to show their net profits together surpass a record 75,000 crore even as their costs of acquiring crude oil soften, three people aware of the matter have said.

- Rajeev Jayaswal

The public sector fuel retailers have held prices since April 2022, and officials say a thorough pricing review is imminent, with the companies possibly sitting on margins of 10 per litre that can be passed on to consumers. The move could help soothe inflation and become significant ahead of the 2024 General Elections.

"Due to higher marketing margin on sale of fuels, the three OMCs (oil marketing companies) posted significant net profit in Q1 and Q2 [of FY2023-24] and the trend will continue in Q3. After results by the end of this month, they may consider reducing petrol and diesel rates between 25 and 10 a litre, keeping some cushion for future spike in international oil prices. A decision will be taken by the companies in consultations with their stakeholders," one of the people said, asking not to be named.

The government is the promoter and majority stakeholder in all the three OMCs. So far, combined net profit of the three firms in first half of 2023-24 was ₹57,091.87 crore, over 4,917% jump from ₹1,137.89 combined net profit for the entire financial year of 2022-23.