Standalone refiners Chennai Petro, MRPL under pressure as OMCs sell fuel below cost

India’s standalone refiners are witnessing pressure after oil marketing companies (OMCs) lowered refined product prices, effectively deviating from the deregulated pricing framework.In a bid to shield consumers from a sharp rise in fuel costs, OMCs have kept retail prices unchanged even as global crude prices moved past $100 per barrel.

This has led to fuel being sold below cost, with discounts reportedly stretching up to ₹60 per litre compared to import parity levels.
The move has resulted in OMCs absorbing a significant portion of the losses to prevent inflationary spillover.

However, the impact is more pronounced for standalone refiners such as Mangalore Refinery and Petrochemicals Limited and Chennai Petroleum Corporation Limited, which are bearing the brunt of the pricing pressure.

This marks the first instance of such intervention since India moved to a deregulated fuel pricing regime, raising concerns around market-linked pricing and margins across the refining sector.

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