Business

Russian Oil : Lottery of Indian companies will open with cheap Russian oil, big consignment of Ural oil is coming

Photo:FILE

Russian Oil

Highlights

  • Higher than normal import of Russian oil beneficial at low price
  • Cheap oil may see improvement in companies’ balance sheets
  • Loss of companies increased due to stable prices of petrol, diesel, LPG

The worst effect of the war of Russia and Ukraine being fought on the soil of Europe is falling on the developing countries of Asia. Crude oil prices reached around $ 84 to 140 in just 4 months. On that, stable prices in India for almost two months have kept the Indian oil companies breathless. However, in this difficult time only Russia is working for India. The Ural grade crude oil, which is getting to Indian oil companies with a discount of about $ 40, has brought a big relief.

According to rating agency Fitch Ratings, higher-than-normal imports of Russian oil at much below market prices may reduce the working capital requirement for state-run retail petroleum companies in the near term. Due to this, even though the common people may not get cheap oil, but the balance sheet of the oil companies can definitely improve.

Damage from Russian oil

Retail petroleum companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have not changed the retail selling price of petrol, diesel and LPG by cost in the last few months. . They incur losses on oil marketing and are making up for it with higher refinery margins from refining cheap Russian crude.

Higher than normal import of Russian oil beneficial

In a report, Fitch said rising global demand and reduced supply for refined products support refining margins and lead to a gradual improvement in oil companies’ marketing margins. According to the report, “higher-than-normal imports of Russian oil at significant discounts to market prices may reduce near-term working capital requirements for oil marketing companies.”

Petrol diesel prices may change soon

The rating agency said, “We expect retail prices of petrol and diesel in India to remain in line with the volatility in crude oil prices in the medium term. This will affect the marketing margins of OMCs for the rest of FY 2022-23.” should improve gradually, even if it is below normal levels.” Crude oil prices rose to a 14-year high of $139 in early March from $84 a barrel. However, later it gradually declined somewhat and at present it is close to $ 119 per barrel.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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