Economy rebound to fuel revenues for oil firms

Moody's Investors Service on Wednesday said earnings for State-owned oil firms IOC, BPCL and HPCL will grow over the next 12-18 months as a gradual easing of pandemic restrictions drives a rebound in economic activity and fuel demand.

While earnings stability of marketing operations will help offset low refining margins, rising fuel demand will in turn increase refinery throughput. The combination of better demand and improving fuel cracks will also support an improvement in Asian refining margins from current levels, it said. Demand for petroleum products in India declined substantially in April and May 2020 following a nationwide lockdown to control the spread of Coronavirus.