January 10, 2021
2 mins read

OMCs may see revenue drop in Q3 FY21

OMC have had a good run in the first half of FY21 with higher inventory gains, fortunes may turn against the companies as lower oil prices in October and November months would result in inventory losses for companies…reports Asian Lite News

After having a good run in most parts of the Covid-19 affected year, oil marketing companies may see an squeeze in their earnings in the October-December quarter of 2020-21 financial year.

OMC have had a good run in the first half of FY21 with higher inventory gains, fortunes may turn against the companies as lower oil prices in October and November months would result in inventory losses for companies such as IndianOil, Bharat Petroleum, Hindustan Petroleum. This even though, the companies continued to maintain good levels of marketing margin on dale of petrol and diesel.

“We estimate OMCs’ earnings to be lower qoq due to a fall in refining inventory gains. Upstream would suffer due to a decline in gas prices. GAIL would benefit from higher LPG-petchem prices and improved LNG trading. GSPL would be affected by RIL’s volume cut,” an analysis done by Emkay Global Financial Services said.

The average Brent price rose 4 per cent qoq to $ 44.6/bbl in Q3 though closing higher at $ 51.2/bbl. The higher prices prevailed only on the month of December.



During the period under review, auto fuel marketing margins were also steady at Rs4-5/litre. Average rupee strengthened during the period while Domestic gas prices declined though spot LNG rates saw a sizable jump.

Q3FY21 witnessed further recovery in volumes as the economy continued to improve from Covid-19-led disruption. Oil product demand was slightly down yoy, while gas demand was back to normal. Refinery throughput improved but CNG volumes were down 8-10 per cent yoy.

According to the brokerage report, PLNG would see some seasonal decline in Dahej utilization. “IGL should report strong numbers as margins were steady and volumes up qoq. GGL’s margins would be affected by a jump in spot LNG. RIL’s earnings would be supported by an uptick in Retail and O2C,” Emkay said in its report.

Also read:‘Indian tech start-up base grew by 10% in 2020’

Previous Story

‘Oil, gas demand to rise in 2021’

Next Story

Govt hints at tax sops for aviation sector

Latest from Business

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and

India to Empower Global South

India is emerging as a pivotal force in the global transition to clean energy, with Union Minister for New and Renewable Energy, Pralhad Joshi, asserting that the country is empowering the Global

Maruti’s Global Push Breaks Record

June shipments hit 37,842 units, signalling robust global demand Maruti Suzuki India recorded its highest-ever monthly exports in June, shipping 37,842 units and marking a new milestone that highlights the company’s expanding

India Bats for Fairer Global Finance: FM Sitharaman

FM Sitharaman stated that we believe that optimal regulation fosters innovation and stability….reports Asian Lite News India supports reforms to the international financial architecture to enhance inclusivity and equity, including Multilateral Development
Go toTop