No big profits, but oil companies making record margins

By OEM Update Editorial April 30, 2020 12:38 pm IST

Fuel retailers are making an unprecedented margin of Rs 13 per litre, six times the average of 2019-20 as domestic fuel rates have been frozen for weeks, while global crude prices have crashed.

However, this will not lead to heavy profits because demand has fallen sharply as the lockdown has kept most motorists away from the pump.

Brent crudeoil fell to $27.10 a barrel on Monday, down 46 per cent since the beginning of March as the Covid-19 pandemic has destroyed about 30 per cent of global oil demand.

US crude fell 28 per cent on Monday to $13 a barrel, a 21-year low, on concerns country’s crude storage was running out of space. Since the beginning of March, the domestic rates of petrol have fallen by Rs 2.3 per litre, or 3.2 per cent, and that of diesel by Rs 2.2 per litre, or 3.5 per cent.