IOCL, BPCL, HPCL's gross refining margins to remain in the range of $9 to $10 bbl: CareEdge
crude oil production by 10 lakh barrels until December 2023. "In this backdrop, Indian refiners which are the key beneficiaries of cheaper Russian crude should still be able to clock GRMs of around $9-10/bbl in FY24 as the likely decline in their margins on processing Brent crude is expected to be offset by the significant expansion in margins on processing Russian crude which can even balance out the potential decline in supply of Russian crude in the near term. Also, with the onset of winter in Western countries, cracks for refined products are expected to improve from the existing levels, further helping the GRMs of Indian refiners," said CareEdge Ratings in its report.
The Covid-19 epidemic caused a significant drop in crude oil prices in FY21, and because of decreased demand and logistical difficulties, Indian refiners' GRMs were also noticeably low. Following the recovery in demand after the pandemic, crude oil prices increased in FY22, which improved the GRMs of Indian refiners. For Indian refiners, FY23 was an unusual year, nevertheless.
They attained very high GRMs, which are mostly due to changes in demand-supply dynamics brought on by the start of the Russia-Ukraine war in February 2022. Geopolitical issues entered the picture, significantly improving India's access to affordable Russian crude oil. For about 85% of its total crude oil requirements, India depends on imports.
Before the start of the Russia-Ukraine war, Russia made up less than 2% of India's total imports. But because of the geopolitical consequences of this struggle, the proportion of cheap Russian crude oil in India's overall crude oil supply increased significantly. Given that retail prices of petrol and diesel are unlikely to follow the
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