State oil firms plan Rs 10/litre petrol, diesel price cut amid record profits

In a potential relief for motorists grappling with rising fuel costs and a measure to curb inflation, state-run oil companies are reportedly contemplating a substantial reduction in petrol and diesel prices by up to Rs 10 per litre next month. The move comes on the heels of an anticipated record profit of Rs 75,000 crore for the third quarter, despite a decline in crude oil costs, as per a report by Hindustan Times.

Against the backdrop of stable fuel prices maintained by public sector fuel retailers since April 2022, signs of an impending pricing review have emerged. Officials suggest that oil marketing companies (OMCs) may have a profit margin of Rs 10 per litre, potentially benefitting consumers.

Sources told Hindustan Times that the three major OMCs, under government administration and holding significant market share, reported substantial net profits in the first half of fiscal year 2023-24. This marked an extraordinary 4,917 per cent increase compared to the entire financial year of 2022-23.

"With higher marketing margins on fuel sales, the three OMCs have posted significant net profits 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 Rs 5 and Rs 10 a litre, keeping some cushion for future spikes in international oil prices. A decision will be taken by the companies in consultations with their stakeholders," a source told Hindustan Times.

Hindustan Petroleum Corporation Ltd (HPCL) reported a consolidated net profit of Rs 5,826.96 crore for the July-September quarter last year, benefiting from low crude prices and higher gross refining margin (GRM). Similarly, Bharat Petroleum Corporation (BPCL) turned its fortunes around by reporting a consolidated net profit of Rs 8,244 crore in the July-September quarter, marking a significant recovery from a net loss of Rs 338 crore in the same period the previous fiscal year.