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Correspondent

21 August 2024 at 10:20:16 am

Crude Reality

Since the Iran crisis erupted five months ago and sent tremors through global energy markets, India’s motorists have been spared the full force of the oil shock. Despite a hike, petrol pumps have generally continued to display familiar prices even as crude surged, because state-owned oil companies quietly absorbed the damage. However, with losses now piling up at Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), it appears that the bill, which had been...

Crude Reality

Since the Iran crisis erupted five months ago and sent tremors through global energy markets, India’s motorists have been spared the full force of the oil shock. Despite a hike, petrol pumps have generally continued to display familiar prices even as crude surged, because state-owned oil companies quietly absorbed the damage. However, with losses now piling up at Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), it appears that the bill, which had been deferred all this while, cannot be avoided. Unless global crude prices retreat sharply, Indian consumers may soon feel the full force of the unabating West Asian crisis. HPCL plunged into a consolidated loss of Rs. 12,265 crore in the June quarter, while BPCL reported a loss of Rs. 3,962 crore - the first quarterly loss for the latter in 15 quarters. The crisis has exposed that India’s fuel-price stability remains heavily dependent on the financial health of state-run oil companies. When global markets turn hostile, these companies are expected to sacrifice margins, protect consumers and absorb geopolitical shocks. This model becomes increasingly fragile when crises become prolonged. Crude oil prices briefly approached $125 a barrel during the height of the West Asia conflict, rising more than 50 percent as fears grew over supply disruptions. Though petrol and diesel prices were eventually raised by more than Rs 7.50 per litre and domestic LPG prices by Rs. 89 per cylinder, the adjustments came too late and were insufficient. Government estimates suggest oil marketing companies have accumulated under-recoveries of around Rs. 75,000 crore during the Iran crisis. HPCL’s refining business in fact had delivered an impressive gross refining margin of $23.80 per barrel in the first quarter, compared with just $3.08 a year earlier. Yet those gains were wiped out by losses in fuel marketing. BPCL faced a similar squeeze. Higher revenues of Rs. 1.59 lakh crore during the quarter could not compensate for suppressed margins and LPG losses. This is the familiar political dilemma of fuel pricing. Governments fear the inflationary consequences of raising prices sharply, especially in an economy where transport costs influence everything from food prices to manufacturing expenses. But delaying adjustments merely shifts it from consumers to public-sector balance sheets. The consequences are already visible. HPCL reported LPG under-recoveries of Rs. 3,607 crore, while BPCL recorded losses of Rs. 3,485 crore on LPG sales. Both companies also face thousands of crores in unpaid subsidy dues. If global crude prices remain elevated, the pressure valve will eventually have to open. Either the government compensates oil companies through larger subsidies by squeezing public finances or consumers face higher fuel prices. India has long benefited from relatively stable domestic fuel prices despite global volatility. But energy markets do not respect political calendars.

Navy doc treat injured Pakistani crew

Mumbai: In a humanitarian gesture, the Indian Navy (IN) rendered lifesaving medical assistance to save the life of a Pakistani crewman on an Iranian fishing vessel in the Arabian Sea, officials said.


The operation took place on Friday/Saturday around 350 nautical miles in the high seas off Oman coast, with the help of the stealth frigate INS Trikand.


On April 4, the INS Trikand monitored a distress call from the Omani vessel 'Al Omeedi' seeking help for a crew member, who was seriously injured with multiple fractures and blood loss.


Further enquiry revealed that the distressed crewman was working on the vessel's engine when he sustained the grievous injuries and was transferred to another Iran-bound dhow, 'FV Abdul Rehman Hanzia', in the vicinity.

On getting the SOS, INS Trikand immediately altered her course to rush medical assistance to the injured crew.


The 'FV Abdul Rehman Hanzia' has a contingent of 11 Pakistanis and 5 Iranians manning the vessel.


The Indian warship's medical officer along with a team of Marine Commandos boarded the FV.


Ob board, the MO started the three hour long medical procedures, controlling the blood flow, suturing and splinting of the crew's injured fingers.

It was a timely response which prevented the patient's total loss of the injured fingers due to gangrene.


The IN stealth warship also provided crucial medical supplies, antibiotics to the FV to ensure the injured crew's wellbeing till the dhow reaches Iran.


The entire crew of the dhow expressed their gratitude to the IN for rendering assistance on time that helped saving their injured mate's life, said the IN officials.

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