IOC Chairman assures minimal impact on bottom line following fuel price cuts
The reduction in fuel prices, announced by Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, came into effect on March 15 at 6 am. These price cuts, covering various fuels including CNG, LPG, petrol, and diesel, are aimed at benefitting consumers and reducing operational costs for millions of vehicles across the country.
In response to the recent announcement of a ₹2 per litre reduction in fuel prices, Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya on Friday, March 15, said that the cuts are unlikely to significantly affect the company's bottom line. Addressing concerns regarding the potential impact on profitability, Vaidya emphasised that it was too early to gauge the precise effects on the upcoming quarter's financials.
He asserted that while the price reduction may have some influence, it is not anticipated to substantially impact profits, adding that the performance of Oil Marketing Company (OMC) stocks is primarily subject to market dynamics.
Vaidya stressed the importance of considering the volatile nature of crude oil prices in determining future courses of action regarding fuel pricing. He highlighted the necessity of observing trends in crude oil movements to make informed decisions regarding pricing adjustments.
"It’s a very dynamic world, crude oil prices play a critical role. We will wait for the crude oil prices, how they are, once it shows some trend whether it’s stable or volatile, then we will take a call," he said.
The reduction in fuel prices, announced by Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, came into effect on March 15 at 6 am. These price cuts, covering various fuels including CNG, LPG, petrol, and diesel, are aimed at benefitting consumers and reducing operational costs for millions of vehicles across the country. Minister Puri emphasised the positive impact of reduced fuel prices on consumer spending, inflation control, and overall economic growth.
Despite the reductions, international crude oil prices remain relatively high, with West Texas Intermediate (WTI) Crude and Brent Crude priced at over $81 and $85 per barrel, respectively. The fluctuating nature of crude oil prices continues to influence market dynamics, prompting cautious deliberation among industry stakeholders.
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