Energy - Waiting for independence - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Energy - Waiting for independence

Aug 28, 2000

Oil prices have hit the roof since they started their climb in the beginning of FY00. This has adversely impacted the oil pool account, as there has been no revision in the final consumer prices of fuel. Consequently, the operating margins of oil companies have taken a hit and they must be keenly awaiting the dismantling of the administered pricing mechanism. The deregulation in the marketing segment is expected by March '02 and oil companies have started beefing up their marketing arsenal to take full advantage of this liberalized scenario. The marketing function is gaining importance for the following reasons:

  • Although with rationalization of tariffs the gross refining margins (GRM's) should improve the overcapacity will keep refining margins under pressure. This will make marketing assets crucial to prevent erosion of aggregate operating margins.

  • In an over-supplied market the bargaining power will shift from the seller to the buyer. Thus bargaining power of marketing companies will increase.

  • Post 2002, the marketing margins should increase, as they are significantly higher in the deregulated markets.

  • Bulk buyers or industrial users will have greater bargaining power in an over-supply situation and realizations in this segment will be first to be hit. Therefore, presence in the retail segment will be important as it allows greater control over prices.

Fluctuations in crude oil prices have made refining margins more volatile and subsequently also the businesses of refining companies. Oil companies will be looking forward to the deregularised scenario to ensure greater stability in earnings.


Equitymaster requests your view! Post a comment on "Energy - Waiting for independence". Click here!

  

More Views on News

IOC Announces Quarterly Results (1QFY21); Net Profit Down 40.8% (Quarterly Result Update)

Aug 3, 2020 | Updated on Aug 3, 2020

For the quarter ended June 2020, IOC has posted a net profit of Rs 21 bn (down 40.8% YoY). Sales on the other hand came in at Rs 901 bn (down 40.0% YoY). Read on for a complete analysis of IOC's quarterly results.

IOC Announces Quarterly Results (2QFY20); Net Profit Down 97.2% (Quarterly Result Update)

Nov 5, 2019 | Updated on Nov 5, 2019

For the quarter ended September 2019, IOC has posted a net profit of Rs 836 m (down 97.2% YoY). Sales on the other hand came in at Rs 1,348 bn (down 13.0% YoY). Read on for a complete analysis of IOC's quarterly results.

IOC 2018-19 Annual Report Analysis (Annual Result Update)

Aug 29, 2019 | Updated on Aug 29, 2019

Here's an analysis of the annual report of IOC for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of IOC. Also includes updates on the valuation of IOC.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

IOC SHARE PRICE


Sep 21, 2020 (Close)

TRACK IOC

IOC - PETROCHINA COMPARISON

COMPARE IOC WITH

MARKET STATS