Oil & Gas Sector Check - Marketing Margins Surge, But GRMs Remain Weak: ICICI Securities
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ICICI Securities Report
Auto fuel net marketing margin has surged to Rs 3.08/litre in Q2 FY22-to-date from Rs 1.43/litre in Q1 FY22 on hefty price hikes and international price fall.
Net margin is at Rs 2.06/litre in FY22-to-date, at Rs 4.42/litre at latest domestic and international prices, and on track to be in line with, or even higher, than our estimate of Rs 2.5/litre in FY22E.
Reuters’ Singapore gross refining margin in Q2 FY22-to-date is at an eight-quarter high of $3/barrel of oil driven mainly by petrol cracks at seven-quarter high, but gross refining margins of oil marketing companies and Reliance Industries Ltd. are weak at $0.982.35/bbl hit by diesel cracks at seven-month and three-quarter lows.
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