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The price of Indian crude basket has shot up 52 per cent since February this year when oil companies had cut petrol and diesel prices. On Wednesday, the Indian crude basket was at $84.31 a barrel. The basket in October averaged at $79.33 a barrel.

Oil industry experts say that if international crude oil prices were to remain above $90 a barrel for the rest of the year, the under-recoveries would be rise to over Rs 60,000 crore for the full year.

However, there is a flip side to this. The spurt in crude prices is boosting the gross refining margins of the integrated refining-cum-retailing companies like IOC, HPCL and BPCL. The impact is mostly on the retailing business. Mr S.V. Narasimhan, Director Finance, IOC, said that the existing mechanism of burden sharing has to be reviewed. The 24 per cent to be shouldered by retailers is a huge amount as far as profitability is concerned. Besides, liquidity is also a concern. Every dollar increase in the four petroleum products will lead to under realisation going up by about Rs 1,800 crore on an annualised basis, he said.

More Stories on : Petroleum | Performance | Hindustan Petroleum Corporation Ltd | Bharat Petroleum Corporation Ltd

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