The Indian Rupee has fallen more than 10% against the USD QoQ. Being the largest purchasers of dollars in the domestic currency market, oil companies like Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) and Indian Oil Corporation have collectively lost around Rs 2,000 crore in September alone due to rupee constantly depreciating against the dollar—as oil remains the biggest import item in India.
The oil marketing companies import around 50,000 barrels of crude each day. Now with the rupee weakening over 10% QoQ, oil companies had to pay Rs 4108 crore each day toward oil purchase instead of Rs 3,438 crore which they paid in the April-June quarter of the current financial year.
To mitigate the losses on under recoveries, oil companies are constantly trying to do some damage control by raising price of petroleum products which are not regulated by the government. About 15 days ago, oil companies raises petrol prices by Rs 3.14 per litre due to weakness in the rupee which made their crude costlier by over 10%.
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