 "Bharat Petroleum, BPCL")
Indian refiners meet most of their crude demand from suppliers in the Middle East.
Bharat Petroleum Corp, India’s third-biggest refiner, expects Middle Eastern producers to cut the official selling prices (OSPs) of their crude in coming months to reflect lower margins on fuel sales, its head of finance said on Saturday.
Lower fuel cracks – the difference between the cost of crude oil and refined product sales – are hitting the profitability of refiners globally. Complex refining margins in Asia have dropped by half to $4.10 per barrel as of July 19 compared with about $8.20 per barrel in February.
“Compared to April-May the OSPs are moderate and these OSPs will be further moderated because cracks are on lower side,” Vetsa Ramakrishna Gupta told an analysts call.
“I don’t think OSP premiums will be on higher side when cracks are on lower side,” he said.
BPCL on Friday said its net profit for the three months ended on June 30 fell 71 per cent from a year earlier to 30.15 billion Indian rupees ($360 million), partly due to lower margins.
Earlier this month, Saudi Aramco cut prices for crude to Asia a second straight month, with its flagship Arab Light crude price for August loadings at its lowest since March.
Indian refiners meet most of their crude demand from suppliers in the Middle East.
Indian refiners have also raised imports of Russian crude sold at discounts after Western nations imposed a raft of sanctions against Moscow for its invasion of Ukraine.
Russian crude discounts have held at $3.50-$4 per barrel for delivery at Indian ports, Gupta said, adding that Russian oil accounts for about 40 per cent of BPCL’s overall crude processing.
BPCL processes about 700,000 barrels of crude per day through its three refineries and sells about 52.5 million metric tons a year of refined fuel through outlets across the country.
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First Published: Jul 20 2024 | 2:33 PM IST
