Bharat Petroleum Corp, India’s third-biggest refiner, expects Middle Eastern producers to cut the official selling prices (OSPs) of their crude in coming months to reflect lower margins on fuel sales, according to its head of finance.
Lower fuel cracks – the difference between the cost of crude oil and refined product sales – are hitting the profitability of refiners globally. Complex refining margins in Asia have dropped by half to $4.10 per barrel as of July 19 compared with about $8.20 per barrel in February.
BPCL on Friday said its net profit for the three months ended on June 30 fell 71% from a year earlier to 30.15 billion Indian rupees ($360 million), partly due to lower margins.
Indian refiners meet most of their crude demand from suppliers in the Middle East.
Indian refiners have also raised imports of Russian crude sold at discounts after Western nations imposed a raft of sanctions against Moscow for its invasion of Ukraine.
Russian crude discounts have held at $3.50-$4 per barrel for delivery at Indian ports, Gupta said, adding that Russian oil accounts for about 40% of BPCL’s overall crude processing.
BPCL processes about 700,000 barrels of crude per day through its three refineries and sells about 52.5 million metric tons a year of refined fuel through outlets across the country.
Tags: BPCL, Oil, OSPs
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