The profit of IOCL and HPCL in the first quarter of FY21 was more than their profits in the previous entire full year. In the month of January, 2020, the Indian basket of crude oil was at $64.3 per barrel. In April 2020, it fell to $19.per barrel and again rose to $42.42 a barrel till 9 September 2020.
Diesel prices in India have been gradually falling after surpassing the petrol price earlier this year. According to Indian Oil Corporation Limited (IOCL), in Mumbai, petrol and diesel rates are around Rs 87.74 per litre and Rs 77.04 per litre respectively. Retail fuel prices are market-determined, and the PSU Oil Marketing Companies (OMCs) take appropriate decision on the pricing of petrol and diesel in line with international product prices and other market conditions.
While the price of the Indian basket of crude oil significantly fell during the lockdown, retail prices of fuel did not commensurate with the global prices. However, it is interesting to note that while India was reeling under severe stress in the first quarter of the current fiscal and the demand for petrol and diesel fell dramatically due to the lockdown restrictions, the profits of oil marketing companies (OMCs) stood at very healthy levels.
The profit after tax of Indian Oil Corporation Limited (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) in Q1 FY21 was more than their profits in the previous full year, according to the data provided in Lok Sabha.
IOCL registered a profit of Rs 1,911 crore in Q1 FY21, compared to Rs 1,313 crore in FY20; and HPCL registered a profit of Rs 2,814 crore in Q1 FY21, compared to Rs 2,637 crore in FY20. PAT of Bharat Petroleum Corporation Limited (BPCL) also stood at higher levels.
In India, retail prices are not commensurate with global prices, as central and state and local city governments continue levying taxes and surcharges on sale of gasoline. Indian fuel prices continue to be heavily loaded with taxes. Petrol attracts excise duty of Rs 32.98 per litre while diesel attracts Rs 31.83 per litre. On top of it, customs duty is 2.5 per cent on petrol and diesel and an additional 3 per cent social welfare surcharge is added to it.