www.rupeedsk.in
Stocks of the three state-owned oil marketing companies will continue to track the rupee-dollar movement given the high volatility in the Indian currency since the last few weeks. The rupee hit new lows this week. It recovered slightly yesterday to end at 60.88 a dollar, up from its life-time closing low of 61.30 a dollar on Wednesday. On Tuesday, the rupee had hit an all-time intraday low of 61.80 a dollar. While weakness in the Indian currency is expected to persist in the near term, the intensity will depend on how effective rupee-supportive measures the government is likely to announce this weekend would be. Every one rupee increase in the value of the dollar increases the price of crude oil for Indian refiners by around $3 a barrel. In the current fortnight, the three public sector oil retailers--Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd, and Bharat Petroleum Corp Ltd--were incurring total daily revenue loss of 3.79 bln rupees on sale of fuels at subsidised rates, up 6% from the previous fortnight.
The daily revenue losses of the public sector oil retailers would rise sharply following the latest steep depreciation of the rupee. Last week, the rupee depreciated around 3.5% against the dollar, while this week it staged a minor recovery. The latest rupee depreciation will reflect in the amount of revenue losses of the public sector oil retailers from the fortnight beginning Aug 16. Since Apr 30, the Indian currency has depreciated around 13%. The three oil retailers are also reporting their Apr-Jun results next week. The companies may manage to report small profits as the government has agreed to partially compensate them for the revenue losses incurred on sale of fuels at subsidised rates in Apr-Jun. The Street will take directions from the operational performance of the companies, including refining margins and throughput. Reduction in interest cost, while expected, will be keenly watched.
Stocks of the three state-owned oil marketing companies will continue to track the rupee-dollar movement given the high volatility in the Indian currency since the last few weeks. The rupee hit new lows this week. It recovered slightly yesterday to end at 60.88 a dollar, up from its life-time closing low of 61.30 a dollar on Wednesday. On Tuesday, the rupee had hit an all-time intraday low of 61.80 a dollar. While weakness in the Indian currency is expected to persist in the near term, the intensity will depend on how effective rupee-supportive measures the government is likely to announce this weekend would be. Every one rupee increase in the value of the dollar increases the price of crude oil for Indian refiners by around $3 a barrel. In the current fortnight, the three public sector oil retailers--Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd, and Bharat Petroleum Corp Ltd--were incurring total daily revenue loss of 3.79 bln rupees on sale of fuels at subsidised rates, up 6% from the previous fortnight.
The daily revenue losses of the public sector oil retailers would rise sharply following the latest steep depreciation of the rupee. Last week, the rupee depreciated around 3.5% against the dollar, while this week it staged a minor recovery. The latest rupee depreciation will reflect in the amount of revenue losses of the public sector oil retailers from the fortnight beginning Aug 16. Since Apr 30, the Indian currency has depreciated around 13%. The three oil retailers are also reporting their Apr-Jun results next week. The companies may manage to report small profits as the government has agreed to partially compensate them for the revenue losses incurred on sale of fuels at subsidised rates in Apr-Jun. The Street will take directions from the operational performance of the companies, including refining margins and throughput. Reduction in interest cost, while expected, will be keenly watched.
