The Hindu Business Line : Indian crude basket touches $132.69/bbl on Monday

New Delhi, June 10 Reflecting the surge in global crude prices of Friday, the Indian crude basket on Monday has touched a new high for the current fiscal at $132.69 a barrel, up $5.73 a barrel from Friday ($126.96 a barrel).

Though the current package worked out by the Government to bail out the public sector oil marketing companies (OMCs) from the soaring international crude prices, may hold good for sometime, but if the current trend of crude pricing continues the package may be required to be relooked at, industry watchers say.

Compensation package

Meanwhile, the OMCs would like to wait and watch the trend before pressing the panic button of mounting under recoveries on sale of petroleum products below the market price, as they feel the recently announced compensation package comprising price hike, duty rejig, oil bonds and higher upstream contribution was sufficient.

Mr Rohit Nagraj, Senior Research Analyst, Angel Broking Ltd, told Business Line that “basically, the current compensation package has been worked out taking the average of $130 a barrel, and if the crude prices move up beyond this level then the under recoveries would be higher”.

If the current global trend is anything to go by, then crude would continue its upward movement and could be a cause of concern, he said.

Benefit some

While the independent upstream companies such as Cairn are set to benefit from higher crude prices, for public sector upstream companies such as ONGC it would be partial as there is a subsidy burden which they have to share, Mr Nagraj said.

The Indian crude basket has so far averaged $124.55 a barrel in June up from $120.91 a barrel in May and $105.77 a barrel in April.

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