Friday, 11 September 2015

Impact of low prices on the Indian refining sector: Under recoveries plunge

The study projects gross under-recoveries (GURs) of OMCs to go down by 54% from Rs. 723 billion for FY15 to Rs. 335 billion for FY16 (estimated at the average Indian basket crude oil price of US$ 55/bbl and INR/US$ 65 for FY16).
8GURs have declined to Rs. 87.4 billion (including cash reimbursement under DBTL) in Q1 FY16 from Rs. 286.9 billion in Q1 FY15 in line with lower global prices of crude oil at US$ ~62 /bbl in Q1 FY16 against US$ 107 /bbl in Q1 FY15.
8Indian basket of crude oil prices have remained lower than US$ 60-65 /bbl over the last eight months (averaging US$ ~56 in January to August 2015 period).
8Soft level of crude oil prices are expected to lead to materially lower under-recoveries on LPG and Kerosene, while deregulated diesel and petrol prices would ensure no subsidy burden on auto fuels (viz. diesel and petrol).

For more details visit indianpetroplus.com

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