More financial pain in the offing for OMCs, upstream companies: CRISIL

Rs 35 billion profit hit in Q3 for OMCs, higher under-recovery burden seen to hit upstream too

State-run oil marketing companies (OMC)s may be staring at just the start of multiple woes, with the rise in crude oil prices and the government effort to contain the retail impact. According to rating agency Crisil, OMCs will take a Rs 35 billion hit on operating profit in the December quarter. With a higher under-recovery burden, both upstream and OMCs may see further financial strain.

“As things stand, average gross marketing margins of the OMCs on diesel and petrol have come off from Rs 3 per litre in the closing quarter of fiscal 2018 to Rs 2.60 per litre in