Oil Marketing Companies Face Growth Outlook Downgrade Amid Rising Crude Oil Prices

Oil Marketing Companies Face Growth Outlook Downgrade Amid Rising Crude Oil Prices

VoM News Desk | September 12, 2023 | 07:10 PM IST | Breaking News | Follow on Google News

Oil Marketing Companies Face Growth Outlook Downgrade Amid Rising Crude Oil Prices. Picture Credits: ONGC official website

OMCs Experience Ratings Reduction by Kotak Institutional Equities Due to High Crude Oil Rates

Oil marketing companies (OMCs), including Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corp Ltd (HPCL), have seen a downgrade in their growth outlook for the July-September quarter (Q2) as international crude oil prices surged above $91 per barrel. Kotak Institutional Equities, a domestic brokerage firm, has downgraded the ratings of all three OMC stocks. The companies have incurred losses on petrol and diesel sales due to frozen retail prices and high crude oil rates.

Market Reaction and Share Decline

Following these developments, shares of auto and oil refineries, as well as marketing firms, experienced declines in their value. The market reacted to suggestions about the potential imposition of an additional 10% tax on diesel-run vehicles to reduce emissions.

Clarification on Tax Proposal

Union Road Transport and Highways Minister Nitin Gadkari initially proposed the need for an additional 10% tax on diesel-run vehicles as a measure to cut emissions. However, he later clarified that there was no proposal under government consideration to impose such a tax.

Impact on Oil Marketing Companies

The combination of rising international crude oil prices and the potential impact of a proposed tax on diesel vehicles has raised concerns about the profitability of oil marketing companies. These developments are closely monitored by investors and industry experts for their implications on the companies’ financial performance.

VoM News Desk

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