Plunging cracks may erode OMCs' supernormal profits, delay fuel price cuts

But low cracks, or net earnings from processing crude into petrol and diesel, have contributed to abysmal refining margins, prompting a rethink on lowering pump prices

European crude oil benchmark Brent sank to a low of around $69 per barrel (bbl) on September 10, a drop of nearly $22/bbl from $91/bbl early April, as China’s economy sputtered. Prices have since climbed by around $2/bbl.

But don’t expect that volatility or differential to translate into something substantial at the pump when you next go to fill your Activa or Innova. This is because Indian oil marketing companies (OMCs) may find it difficult to transfer the gains originating from lower crude oil prices to consumers at the pump — barring a nudge from New Delhi