The Hindu Business Line : Crude price rise pressuring margins: BPCL

BHARAT Petroleum Corporation Ltd has said in spite of recent duty cuts by the Union Government, current prices of petroleum products would be inadequate to cover costs if international oil prices continue to rise.

"Major increases in international oil prices, coupled with maintaining prices of major retail products for the customers, has put substantial pressure on the marketing margins. In case international prices keep on ballooning, the current domestic prices would be inadequate to cover costs," Mr Sarthak Behuria, Chairman and Managing Director, BPCL, said. Mr Behuria was speaking to shareholders at the company's annual general meeting on Monday.

International oil prices have increased by about 50 per cent from $30 per barrel at the beginning of this year to $45 per barrel today. Oil prices are expected to remain at considerably high levels during the rest of 2004 and even in early 2005, he said.

Although this would mean higher refinery margins, the pressure of trying to maintain customer prices of petrol, diesel, etc., at current levels at a time when global prices keep rising will put pressure on marketing margins, Mr Behuria said.

BPCL group, which includes subsidiaries Kochi Refineries Ltd and Numaligarh Refinery Ltd, turnover of Rs 62,570 crore in financial year 2003-04 against Rs 56,925 crore last year.