Government Fuel Plan: Amidst the situation arising in the Middle East and signs of depletion of energy resources due to the closure of the Strait of Hormuz, the Indian government is planning to provide relief to the people. Government petroleum marketing companies are currently not increasing the retail prices of fuel, due to which financial pressure is increasing on them. To reduce this loss, the government is planning to supply petrol and diesel to refineries at prices lower than the imported rates.
If such a decision is taken, it may have a negative impact on single refinery companies like MRPL, CPCL and HML. Let us know about this plan of the Central Government….
Consideration of change in refinery transfer price
According to the information received, petroleum marketing companies are considering options like limiting the Refinery Transfer Price (RTP) or fixing some relaxation in it. RTP is the internal price at which refineries sell petrol and diesel to their own marketing divisions.
The purpose of this move is to pay refineries less for the fuel than it would cost to import it. If crude oil prices remain high in the international market, refineries will not be able to pass on the entire burden of increased costs through RTP and may have to bear some part of it themselves. Due to which the financial burden on these companies is likely to increase.
Private refineries may also be affected
According to the information received from the media report, if the proposal related to RTP is implemented on private refinery companies also, then it can also affect companies like Nayara Energy and Reliance Industries Limited.
In fact, these companies supply a major part of their petrol and diesel production to oil companies. Out of more than one lakh petrol pumps in the country, about 90 percent are operated by these government oil marketing companies. Therefore, if there is a change in the terms of purchase, the business of private refineries may also be affected.
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