Gross refining margins (GRMs) of public-sector oil marketing companies may recover on account of strong demand and higher marketing margins, says a report. According to stock brokerage ICICI Securities, GRMs of oil marketing companies (OMCs) in the first quarter of 2016-17 so far is sharply lower compared to the estimates in the last fiscal. While the first quarter GRMs estimated for state-run HPCL are marginally lower, those for other public sector entitiesBharat Petroleum Corp (BPCL) and Indian Oil Corporation are higher than the forecast for whole of the current fiscal, it added.
“We are hopeful of recovery in GRMs as recent data suggests strong global oil demand growth,” ICICI Securities said in a report. “Higher marketing margins than assumed are also not ruled out,” it added. The brokerage has estimated GRMs of the OMCs to be at USD 4.3-5.5 a barrel, which is 11-28 per cent lower than their 2015-16 estimates, the report said. GRM generally refer to the difference between the total value of petroleum products coming out of an oil refinery and the cost of crude oil. “Our assumption of OMCs’ 2016-17 GRMs are conservative and we estimate that their first quarter GRMs have been boosted by inventory gain of USD 1.1/bbl,” the report said. Julius Nattinen Womens JerseyShare This