Energy - OMCs (BPCL | HPCL | IOCL): A false but worrying alarm - Kotak

The petroleum minister's clarification on not interfering with auto fuels pricing mechanism on an ad-hoc basis may provide some relief, post a media flash suggesting the possibility of OMCs absorbing higher crude prices. However, the government's intent to maintain higher excise duties despite a sharp jump in fuel prices over the past few months, may rule out any possibility of expansion in marketing margins even in a reasonable crude price and exchange rate environment and thus, defy the thesis of higher multiples for marketing profits. We remain negative on OMCs.

Source : Equity Bulls

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