Government sources have also told CNBC-TV18 that pump prices will not be raised despite the recent surge in crude oil prices.
Crude prices continue to surge with little sign of easing. After logging their biggest weekly gain on record last week, US crude prices have risen nearly 30% on Monday, nearing the $120 per barrel mark.
Rising oil prices are a key negative for Indian markets, given the country’s status as a major net importer of crude oil.Probal Sen, energy analyst at ICICI Securities, said losses for HPCL, for example, could be as high as around ₹90 at the net profit level, based on the brokerage’s scenario analysis.
“It could be higher or lower depending on the direction of GRMs, because that is the other key factor. If prices remain this elevated, even with GRMs of around $11-12 that we had earlier built into our estimates, the losses could still be significant, though they may vary slightly,” Sen said.
“If retail fuel margins continue to remain at the current negative levels, the company could report a negative EPS of around ₹80-90 in an absolute worst-case scenario,” he added.
Sen clarified that the estimate is annualised. “We are essentially extrapolating what could be a month or two of these declines into an annualised number. But that represents the worst-case scenario,” he said.
The rise in oil prices have roiled financial markets globally, with the Dow Jones futures declining as much as 1,100 points in early trading on Sunday. Gulf nations, including Iraq, the UAE and Qatar have cut back on production due to the ongoing concerns and as they continue to run out of barrels for storage of the produced crude, as tankers are stuck at the Persian Gulf due to the ongoing war.
