Odisha News, Odisha Latest news, Odisha Daily - OrissaPOST
  • Home
  • Trending
  • State
  • Metro
  • National
  • International
  • Business
  • Feature
  • Entertainment
  • Sports
  • More..
    • Odisha Special
    • Editorial
    • Opinion
    • Careers
    • Sci-Tech
    • Timeout
    • Horoscope
    • Today’s Pic
  • Video
  • Epaper
  • News in Odia
  • Home
  • Trending
  • State
  • Metro
  • National
  • International
  • Business
  • Feature
  • Entertainment
  • Sports
  • More..
    • Odisha Special
    • Editorial
    • Opinion
    • Careers
    • Sci-Tech
    • Timeout
    • Horoscope
    • Today’s Pic
  • Video
  • Epaper
  • News in Odia
No Result
View All Result
OrissaPOST - Odisha Latest news, English Daily -
No Result
View All Result

Indian oil refiners stare at Rs 25,000 crore inventory loss: Crisil

IANS
Updated: April 24th, 2020, 05:00 IST
in Business
0
Share on FacebookShare on TwitterShare on WhatsAppShare on Linkedin

New Delhi: For oil refiners, the COVID-19 pandemic seems to have delivered a dual blow — big inventory loss in the January-March quarter and a likely plunge in gross refining in the subsequent three months.

According to Crisil Ratings, Indian oil refiners may make inventory loss of over Rs 25,000 crore in the January-March quarter because of 70 per cent fall in crude oil prices. The likely plunge in gross refining margins would follow (GRMs) in the first quarter (April-June) of Fy21 because of demand destruction.

Also Read

Bombay Stock Exchange BSE

Stock markets close lower amid caution ahead of Q1 earnings; IT, oil shares drag

23 hours ago

UAE unveils Golden Visa scheme; Indians could be benefitted

24 hours ago

Crude prices nosedived from an average $55 per barrel in February to $33 in March and closed at around $20 end of March as demand slumped because of the pandemic. On April 12, OPEC+2 reached a deal for a record production cut of 9.7 million barrel a day. Yet crude prices have hovered low because of the pandemic-induced plunge in demand across the globe.

“It has caught refiners on the wrong foot,” the rating agency said in its report on the oil sector.

India has 250 million tonne per annum refining capacity and refiners keep inventory of 20-50 days of crude to a void disruption in operations. The rapid fall in crude oil prices means inventory loss of $10-20 per barrel. The final figure of inventory loss will be estimated based on the price prevailing on March 31, 2020.

This loss could be offset only once the crude oil prices rebound, but going by current market dynamics the slump in global demand is expected to prolong.

“Inventory losses would be more for refineries located away from the coast because they have to stock crude for longer periods. That means refiners will have to borrow more working capital to fund the crude oil purchased earlier,” said Sachin Gupta, Senior Director, Crisil Ratings.

In addition to inventory losses, the operating performance of refiners is expected to remain weak in the first quarter of FY21 due to lower volumes and lower GRMs.

With demand culled further because of extension of lockdown up to May 3, refineries are staring at halving utilisation during the April-June quarter. Refineries that replenished their products inventory are staring at significant curtailment of operations.

“Our base-case assumes the lockdown lasting for up to 1.5 months, with another 1-1.5 months required to resume and stabilise operations. Additionally, refining margins on high-yield products, such as aviation turbine fuel, motor spirit and high-speed diesel, have plummeted and are expected to remain weak over the near term. That will affect the operating metrics of refiners,” it said.

But oil marketing companies are expected to fare better than standalone refiners because of higher marketing margins for some products. For example, retail prices of petrol haven’t fallen in tandem with crude rates, which implies higher marketing margins.

Nitesh Jain, Director, Crisil Ratings, said, “Lower throughput and lower margins resulting from suppressed demand outlook will hurt the credit metrics of oil refiners. Though strong government/parent support will lend a shoulder, and continue to support the overall credit profiles of refiners. Revival in demand and improvement in GRMs will be key monitorables in the road ahead.”

(IANS)

Tags: Crisilcrude oilinventoryRefinery
ShareTweetSendShare
Suggest A Correction

Enter your email to get our daily news in your inbox.

 

OrissaPOST epaper Sunday POST OrissaPOST epaper

Click Here: Plastic Free Odisha

#MyPaperBagChallenge

Ipsita

December 12, 2019
#MyPaperBagChallenge

Tapaswini Mallick

December 12, 2019
#MyPaperBagChallenge

Akriti Negi

December 12, 2019
#MyPaperBagChallenge

Faiza Firdous

December 12, 2019
#MyPaperBagChallenge

Swarit Praharaj

December 12, 2019
#MyPaperBagChallenge

Archana Parida

December 12, 2019
#MyPaperBagChallenge

Debasis Mohanty

December 12, 2019
#MyPaperBagChallenge

Akshaya Kumar Dash

December 12, 2019
#MyPaperBagChallenge

Surya Sidhant Rath

December 12, 2019
#MyPaperBagChallenge

Sarmistha Nayak

December 12, 2019
#MyPaperBagChallenge

Jhili Jena

December 12, 2019
#MyPaperBagChallenge

Subhajyoti Mohanty

December 12, 2019
#MyPaperBagChallenge

Pragyan Priyambada

December 12, 2019
#MyPaperBagChallenge

Diptiranjan Biswal

December 12, 2019
#MyPaperBagChallenge

Jyotshna Mayee Pattnaik

December 12, 2019
#MyPaperBagChallenge

Anup Mahapatra

December 12, 2019
#MyPaperBagChallenge

Saishree Satyarupa

December 12, 2019
#MyPaperBagChallenge

Manas Samanta

December 12, 2019
#MyPaperBagChallenge

Sibarama Khotei

December 12, 2019
#MyPaperBagChallenge

Amritansh Mishra

December 12, 2019
#MyPaperBagChallenge

Chinmay Kumar Routray

December 12, 2019
#MyPaperBagChallenge

Kamana Singh

December 12, 2019
#MyPaperBagChallenge

Aman Kumar Barisal

December 12, 2019
#MyPaperBagChallenge

Sarfraz Ahmad

December 12, 2019
#MyPaperBagChallenge

Priyabrata Mohanty

December 12, 2019
#MyPaperBagChallenge

Pratyasharani Ghibela

December 12, 2019
#MyPaperBagChallenge

Anshuman Sahoo

December 12, 2019
#MyPaperBagChallenge

Shreyanshu Bal

December 12, 2019
#MyPaperBagChallenge

D Rama Rao

December 12, 2019
#MyPaperBagChallenge

Rajashree Pravati Mohanty

December 12, 2019

Archives

Editorial

Toll Sucks Life

Nitin Gadkari
July 9, 2025

Union Road Transport and Highways Minister Nitin Gadkari took everyone by surprise when at a function in Nagpur, where the...

Read more

Bloodline

BJP-Shiv Sena
July 8, 2025

The coming together of the Thackeray cousins – Raj Thackeray, chief of the Maharashtra Navnirman Sena (MNS) and Shiv Sena...

Read more

Acknowledge Failure

Deputy Chief of Army Staff Lieutenant General Rahul R Singh
July 7, 2025

Deputy Chief of Army Staff Lieutenant General Rahul R Singh’s candid revelations about Operation Sindoor at a FICCI event ‘New...

Read more

Politics of Philosophy

AAKAR PATEL
July 6, 2025

The BJP’s constitution (Article 3) says, “Integral Humanism shall be the philosophy of the party.” The party’s membership form has...

Read more
  • Home
  • State
  • Metro
  • National
  • International
  • Business
  • Editorial
  • Opinion
  • Sports
  • About Us
  • Advertise
  • Contact Us
  • Jobs
Developed By Ratna Technology

© 2024 All rights Reserved by OrissaPOST

  • News in Odia
  • Orissa POST Epaper
  • Video
  • Home
  • Trending
  • Metro
  • State
  • Odisha Special
  • National
  • International
  • Sports
  • Business
  • Editorial
  • Entertainment
  • Horoscope
  • Careers
  • Feature
  • Today’s Pic
  • Opinion
  • Sci-Tech
  • About Us
  • Contact Us
  • Jobs

© 2024 All rights Reserved by OrissaPOST

    • News in Odia
    • Orissa POST Epaper
    • Video
    • Home
    • Trending
    • Metro
    • State
    • Odisha Special
    • National
    • International
    • Sports
    • Business
    • Editorial
    • Entertainment
    • Horoscope
    • Careers
    • Feature
    • Today’s Pic
    • Opinion
    • Sci-Tech
    • About Us
    • Contact Us
    • Jobs

    © 2024 All rights Reserved by OrissaPOST