Oil retailers losing Rs 21 per litre on petrol and Rs 28 on diesel: Jefferies

The energy sector, particularly OMCs, is under pressure from high global crude prices and refining margins, coupled with government-mandated price stability. This creates a challenging environment for profitability.

Maintain a bearish bias on OMCs, looking for short opportunities or avoiding long positions until pricing freedom or government compensation improves.

For Indian markets, this story mainly matters for IOC and the Energy, Oil & Gas pocket. The current signal is bearish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: As a major state-run OMC, it is directly affected by losses on petrol and diesel sales. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Indian state-run oil companies are losing Rs 21 per litre on petrol and Rs 28 per litre on diesel.
• •These losses persist despite a recent excise duty cut.
• •Surging global refining margins, driven by Middle East supply disruptions and Russian infrastructure damage, are contributing to the situation.
• •Retail fuel prices have been frozen, preventing OMCs from passing on higher costs.
• •Risk flag: Potential government intervention or compensation for OMCs could mitigate losses.