He added that the firms are making up for losses and preparing themselves for a likely hold in prices during the upcoming elections. According to a report by Emkay Global Financial Services on December 31, the GMM on diesel and petrol stood at over Rs 7 a litre each.
A Reuters report said on Wednesday that state-owned fuel retailers had stopped absorbing a government-mandated cut of Rs 1 a litre in their marketing margins due to a steep fall in global oil prices. Responding to this, IOC chairman Sanjiv Singh said: “We have not recouped the prices that were absorbed in the month of October.”
This comes at a time when the Emkay report highlighted that for the third quarter of the financial year, GMM on diesel and petrol on a fixed refinery transfer price (RTP) basis stood at Rs 2.5-2.8 per litre. RTP is the price paid by OMCs to the refineries.
HPCL Chairman and Managing Director M K Surana said: “Pricing is based on a formula. The cut of Rs 1 is not part of our petrol and diesel prices, due to a lower pricing regime.”
The finance ministry, too, had cut its production tax on the two fuels by Rs 1.50 a litre in October, when prices of petrol touched Rs 84 a litre and diesel was at Rs 75.45 a litre.
On Wednesday, prices of petrol touched a 15-month of Rs 68.65 a litre in Delhi, while diesel was seen at Rs 62.66 a litre. In the last three months, the prices of petrol came down by over Rs 15, while that of diesel by around Rs 13 a litre.
Singh added that IOC has been adjusting retail prices on a daily basis after factoring in the Rs 1 a litre absorption. The absorption in marketing margin for a day was supposed to wipe the annual profit of OMCs by Rs 4,500 crore during financial year 2018-19.