Representational image | Photo: Mathrubhumi
New Delhi: Oil marketing companies (OMC) are likely to reduce prices of petrol and diesel, according to government sources.
The companies have “almost recovered their losses” and are “nearing normalcy.” As a result, the expectation is for the companies to lower the prices of petrol and diesel, as the sources from the government said on Wednesday.
"OMCs have good quarterly results and they are going for another good quarterly results. So, expecting OMC's to cut down the diesel petrol prices as they have no under-recoveries on diesel and petrol," the source said.
According to the sources, an oil production cut by one of the members of the Organization of the Petroleum Exporting Countries (OPEC) will not impact the market due to emerging alternative markets.
According to an official of the Ministry of Petroleum and Gas, there will be a little impact but not so much as there is sufficient oil supply in the market.
On Sunday, OPEC plus countries made no changes to its planned oil production cuts for the rest of the year.
Saudi Arabia, the world's leading oil exporter, has also volunteered to implement further production cuts starting from July. However, sources suggest that these decisions by oil producers are unlikely to cause a shortage of crude oil supply.
"There is no shortage of crude oil supply in the market. Producers' decision to take further production cut expected to have no impact," he said.
Officials further said, "We have successfully managed the situation of availability of the fuel. Sustainability and the green transition are being done successfully. Today, we held a meeting with OMCs on the green hydrogen mission."
Officials further stated that the government's plan to achieve 20 per cent ethanol blending is on track, and there are no limitations in blending ethanol up to that percentage
"There were some challenges in the beginning but we have managed quite well. Now, with new technology, auto companies are coming with advancements in engine technology," he added.