Elevated Crude Prices Making Fuel Marketing Losses Unsustainable: ICRA

Prashant Vashisht, Senior Vice President & Co-Group Head, Corporate Ratings, ICRA Limited.

“The oil marketing companies are incurring substantial losses on the sale of auto fuels and domestic LPG owing to high international crude oil and product prices. ICRA estimates that at crude prices of USD 120–125 per barrel, and considering the past 10-year average crack spreads for auto fuels, oil marketing companies incur losses of around Rs 1,000 crore per day on the sale of auto fuels and domestic LPG. This level of losses is unsustainable and would need to be addressed if elevated crude oil and product prices persist over an extended period.”