The oil price spurt may be adversely affecting the fuel consumers, but it is the oil companies that are making the most from the current situation, strengthening their margin on the sale of petrol and diesel and jacking up profits.
What this implies is that while rising fuel prices burn a bigger hole in the consumers' pockets, the Oil Marketing companies are increasing their earnings and getting a lift in the current difficult environment created by the Covid-19 pandemic.
At the current historic high fuel price levels in the country, the marketing margin taken by the oil marketing companies (OMCs) on retail sale of petrol and diesel has touched a high of over Rs 3 per litre.
According to a report from Motilal Oswal Financial Services, Oil Marketing companies are earning marketing margins of Rs 2.8-3.6 per litre on petrol and diesel. This is higher than their long-term average of Rs 3 per litre and has been facilitated by regular price hikes. As the OMCs are still raising the price of petrol and diesel in phases, companies could expect to give a further boost to their revenue and profits. Sources in the OMCs said that margins are related to refinery gate prices at which marketing companies get products for sale at pumps
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