Falling global crude oil prices have benefitted the Indian oil marketing companies (OMCs) the most and their interest expenses have declined 30 per cent from Rs 10,283 crore in March 2014 to Rs 7,190 crore in March 2015.
Other than the decline in global crude prices even the deregulation of diesel prices— linking the prices to market movement — benefitted the companies as they were able to reduce their subsidy losses on sale of diesel. Shares of OMCs rose significantly in the financial year and while Hindustan Petroleum Corporation Limited (HPCL) witnessed its share prices jump 109 per cent, that of Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Ltd (IOCL) rose by 76 per cent and 32 per cent respectively.
The aggregate market capitalisation of these three companies also rose 52 per cent from Rs 1.11 lakh crore to Rs 1.7 lakh crore. Lower levels of crude oil prices and fall in interest rates will only benefit these companies going forward.