OMCs: Demand recovery, inventory gains, marketing margins to drive earnings

Over the last three-four days, OMCs have increased the per litre price of gasoline and diesel by a total of Rs 2.14 and Rs 2.23, respectively

Shares of state-run oil-marketing companies  Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL), and Indian Oil (IOC) are up 22-29 per cent from their May lows. 

Besides the resumption of economic activities, the fuel price hikes undertaken by these OMCs has been taken positively by investors. These have improved confidence in marketing margins on retail fuels like petrol and diesel, looking at the rise in crude oil prices. Analysts now believe the marketing margins of the state-owned companies will remain firm as they are awaiting further price hikes in coming days in line with the rise in global oil prices.

Over the