Stocks of state-owned oil companies were battered on Wednesday as oil prices rose in the global markets while the rupee once again fell below 60 against the dollar. The marginal increases in the price of diesel every month are inadequate and the industry’s under-recoveries are once again seen as rising.
“There has been a significant rally in crude oil prices in the last few days as they hit a 14-month high at NYMEX and a 5-year high in domestic bourses amidst tensions in the Middle East, which raised concerns about supply disruptions, and with market expectations of a sharp drop in crude inventories in the United States, the world’s top oil consumer,” says Sugandha Sachdeva, AVP, Energy Research, Religare Securities.
The petroleum ministry announced recently that under-recoveries on diesel have crossed 8 per litre and the industry’s daily losses have shot up to 358 crore — its highest level this fiscal. The three oil marketing companies together are expected to post under-recoveries of close to 28,000 crore for the April-June ’13 quarter, which may go up if the rupee and crude oil continue their northward course.
“There has been a significant rally in crude oil prices in the last few days as they hit a 14-month high at NYMEX and a 5-year high in domestic bourses amidst tensions in the Middle East, which raised concerns about supply disruptions, and with market expectations of a sharp drop in crude inventories in the United States, the world’s top oil consumer,” says Sugandha Sachdeva, AVP, Energy Research, Religare Securities.
The petroleum ministry announced recently that under-recoveries on diesel have crossed 8 per litre and the industry’s daily losses have shot up to 358 crore — its highest level this fiscal. The three oil marketing companies together are expected to post under-recoveries of close to 28,000 crore for the April-June ’13 quarter, which may go up if the rupee and crude oil continue their northward course.
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