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Indian refiner BPCL sees further cuts in oil OSPs as fuel margins drop
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, its head of finance said .
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 USD 4.10 per barrel as of July 19 compared with about USD 8.20 per barrel in February.
“Compared to April-May the OSPs are moderate and these OSPs will be further moderated because cracks are on lower side,” Vetsa Ramakrishna Gupta told an analysts call.
“I don’t think OSP premiums will be on higher side when cracks are on lower side,” he said.
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 (USD 360 million), partly due to lower margins.
Earlier this month, Saudi Aramco cut prices for crude to Asia a second straight month, with its flagship Arab Light crude price for August loadings at its lowest since March. [CRU/OSP]
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