Rupee fall delays oil firms' break-even

The fall in the value of the rupee against the dollar has pushed back the break-even point of the country’s oil marketing companies to $60 per barrel from the earlier $67 per barrel as the companies are paying more for oil in rupee terms. The rupee, which fell 8.88 per cent since the beginning of September to an all-time low of less than 49 per dollar last week, has negated much of the impact of an over 45 per cent dip in crude oil prices since early July. As the value of the rupee falls, the companies have to pay more for crude oil in rupee terms, resulting in increased under-realisation on the fuels that they sell. The oil companies, Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, sell petrol, diesel, kerosene and cooking gas at below-production costs, due to which they are... [read full story]