Gross Refining Margins of State-Run Oil Refineries Doubled in FY23

SEATTLE (Oil Monster): The gross refining margins (GRMs) of refineries run by public sector oil marketing companies (OMCs) in India witnessed notable surge during the previous financial year. This was mainly driven by rising domestic demand for petroleum products and cheaper oil imports from Russia.

The average GRM of major state-run oil refineries rose significantly in the range between 68% and 109% in FY23, when compared with FY22. The Indian Oil Corporation (IOC) and Hindustan Petroleum Corp. Ltd (HPCL) reported average of $19.52 per barrel and $12.09 per barrel respectively, whereas Bharat Petroleum Corporation Ltd. (BPCL) reported an average of $20.04 per barrel.

Meantime, the OMCs noted that the benefit of higher GRMs were offset by suppressed marketing margins of certain petroleum products. It must be noted that retail diesel and petrol prices in the country has remained more or less unchanged since November last year, in spite of volatility in global crude oil prices.

According to Prashant Vashisht, vice-president of Corporate Ratings, ICRA, the robust demand for diesel, petrol and aviation turbine fuel in FY23, especially in Q4, resulted in significant growth to GRMs.

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