Retail prices of diesel & petrol will have to be raised at some point: Moody's Ratings
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- ✓Moody’s Ratings said retail prices of diesel and petrol will have to be raised at some point.
- ✓Vikas Halan said, "It has to be a combination of all three parties involved -- the government, the OMCs, and the consumer." High crude costs and a weak rupee are hurting oil companies.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Business Line
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
State-run oil marketing companies (OMCs) cannot continue to absorb high crude oil prices while freezing retail prices of diesel and petrol for long durations, particularly at a time when Brent is constantly hitting $100 per barrel coupled with record freight and insurance premiums.
For Indian refiners, said Moody's ratings, the EBITDA growth, or operational profitability, will only come when they are able to pass on some of the increase in prices.
Vikas Halan, Managing Director Corporate Finance Group at Moody's Ratings, told businessline, "I think from a pure math perspective, just adding the numbers here, when you look at the problem, it's a problem of who bears the losses. Who puts the bill here, and it has to be a combination of all three parties involved -- the government, the OMCs, and the consumer. It can't be one alone."
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