The government previously allowed the recovery of such losses in subsequent periods, before reversing the suspension of daily price resets. This should enable the oil marketing companies (OMCs) to partly recoup the FY23 (April 2022 to March 2023) losses in first half of FY24, before the fall in crude prices in recent months is reflected in retail prices.
”We expect the Indian oil marketing companies’ marketing segment to turn profitable from the financial year ending March 2024 (FY24) as crude oil prices fall to Fitch’s assumption of USD 78.8 per barrel, following large losses in FY23 due to high crude prices and unchanged retail fuel prices,” it said. The rating agency expects India’s petroleum product demand to grow by mid-single digit percentage in the medium term, supported by forecast that the GDP will grow by 6-7 per cent in the next few years, the government’s increasing spending on infrastructure and a pick-up in industrial activity. State-owned oil marketers are likely to turn profitable on fuel marketing in the current fiscal ending on March 31, 2024, following large losses in the previous year, Fitch Ratings said on Monday.
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