Oil marketing companies make higher margins as crude falls

It is supposedly market-driven pricing, but over the last around nine weeks, state-run oil marketing companies (OMCs) haven’t let the decline in crude oil prices benefit consumers. Instead, these firms have just made higher margins on the sales of auto fuels. OMCs haven’t reduced the prices they charge the retailers for the diesel and petrol since November 4, so their marketing margins on the two fuels have risen to around Rs 9/litre or roughly 30% from the October level, analysts said. The price of Indian basket of crude fell from the level of $83.7/barrel on November 2 to $74.6/barrel on December 28 (see chart).