The spike in profits of the state-owned refiners and the general election of 2024 has kindled hopes of a cut in petrol and diesel prices soon as they have not changed since May 2022.
Industry sources and government officials indicated any change in prices could be just ahead of the Lok Sabha polls in April if the global crude prices fall below $80 per barrel and remain stable.
They said the government would be closely watching the emerging geopolitical situation including the tensions in the Red Sea as it would be wary of any sudden spike in fuel prices to mar its electoral prospects.
The three state-owned firms have reported a combined profit of over Rs 69,000 crore in the first nine months of the current fiscal.
The three PSU oil marketing companies — Indian Oil, BPCL and HPCL — are expected to continue making a profit till the oil price remains below $85 a barrel, analysts have said.
Due to the Russia-Ukraine war, the Indian basket of crude prices shot up by an average of 18 per cent in 2022-23 to $93.15/barrel compared with $79.18/barrel in 2021-22, leading to huge marketing losses by OMCs as they could not pass on the prices to consumers.
The Indian basket averaged $74-75/barrel in May and June 2023, $80.37 in July before rising to $93.54 in September. It has since moderated to $90.08 in October, $83.46 in November and $79.22 in January 2024.
