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Petrol, diesel demand reach 89% of normal in May, June
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SME Times News Bureau | 27 Jun, 2020
The worst phase for oil
marketing companies may be over due to smart recovery in the sales of
both petrol and diesel in May and June, with India gradually unlocking
itself from the lockdowns imposed to contain COVID-19 spread.
According
to a research report by ICICI Direct, though sales were down 45% in
April due to the lockdown for almost all oil marketing companies, mainly
the country's largest fuel retailer Indian Oil Corporation (IOC), it
recovered sharply in May and June. Petrol and diesel demand is currently
at 85-89 per cent of the normal level.
With fuel prices revised
upwards for the last three weeks starting June 7, and IOC having hiked
retail prices by Rs 9-10/litre in June, the marketing situation of oil
companies would once again get steadied.
But the brokerage has
taken a cautious approach over the fortune of IOC going ahead as
pressure points remain in terms of declining refining margins.
The
gross refining margin (GRM) is the difference between the value of
petroleum products such as petrol and diesel when they leave the
refinery and the value of the crude oil entering the refinery.
The
GRM for IOC has fallen off the cliff from a high of $8.5 per barrel in
FY18 to an estimated $0.1 per barrel in FY20. Even going ahead, the
recovery is expected to stabilise around $4 a barrel (less than half of
FY18 levels) in FY21 and FY22, the brokerage has said.
"Benchmark
Singapore GRMs are currently very low with some recovery witnessed
recently. Improvement in petrol & diesel spreads will be important
for stable GRMs. Going forward, we estimate GRMs at $4/bbl for both
FY21E and FY22E," ICICI Direct said in its report.
IOC's
marketing sales degrew 4.5% YoY to 20.7 million tonnes on account of
lower diesel sales. Going forward, considering the extended lockdown in
Q1FY21E, we expect marketing sales at 81.5 MT and 92 MT for FY21E and
FY22E respectively, the report said.
The estimate for crude throughput is at 64.4 MT and 70 MT for FY21E and FY22E respectively.
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
| Japanese
Yen |
58.85 |
56.85 |
| As on 13 Aug, 2022 |
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