Pure fuel manufacturing stays a loss-making proposition for many fields for the Indian upstream producers as government-dictated fuel worth stays at its lowest stage, ranking company Icra has stated.
The home fuel worth notified at USD 1.79 per million British thermal unit for the six months starting April 1 stays the bottom because the establishment of the modified Rangarajan system.
Moreover, the ceiling on worth for fuel produced from deep water, extremely deepwater, excessive temperature and high-pressure fields has additionally been introduced at USD 3.62 per mmBtu for April-September 2021-22 which is 10.8 per cent decrease than the worth ceiling of USD 4.06 for October-March 2020-21 which might dampen the event of such initiatives.
“Whereas that is unfavourable for home producers, it should profit fuel customers. The customers will even profit in the long term from the expectations of continued provide overhang,” Icra stated commenting on the fuel worth notified by the federal government earlier this week.
As per an Icra word, at such low fuel costs, fuel manufacturing stays a loss-making proposition for many fields for the Indian upstream producers however some decline in oil area companies/gear prices.