OMC earnings to take 10-27% hit as govt raises duties, bars fuel price hike

Marketing margins to be squeezed by 64%; companies did not pass on the benefits of lower global petroleum prices to consumers

The decision by the government to raise duties on petrol and diesel and not allowing oil marketing companies (OMCs) to increase retail prices might squeeze their marketing margins by about 64 per cent. Analysts expect gross marketing margins to still be around Rs 7 a litre on the two fuels.
 

This is because OMCs did not pass on the benefits of lower global petroleum prices to consumers —at one point, the gross marketing margin was Rs 19. The cut in marketing margin has come at a time when it was the only saving grace for OMCs’ earnings. Refining margins have