Business Standard
S&P Global Ratings on Friday said state-owned Indian Oil Corporation (IOC) faces rising pressure to balance fuel affordability with profitability as prolonged tensions in West Asia increase crude oil prices and squeeze marketing margins. The ratings agency said disruptions in the Strait of Hormuz and elevated crude prices could widen the gap between domestic retail fuel prices and raw material costs, potentially hurting the company's earnings, cash flow and liquidity position over the next 12 months. India, the world's third-largest oil importer, relies heavily on imported crude to meet domestic fuel demand, with diesel accounting for nearly 39 per cent of total petroleum consumption. "IOC faces a conundrum. Its earnings and cash flow over the next 12 months are turning increasingly uncertain as the Middle East conflict becomes protracted. IOC has to balance its role of meeting the country's energy needs while absorbing losses due to high crude oil prices," it said. "Given the ...
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