Capex Flex, But at What Cost for OMCs?

Oil Marketing Companies (OMCs) are facing growing pressure on cash flows with growing capital expenditure in the face of weak profits and delayed projects. Under-recoveries during the first nine months of FY25 were ₹29,160 crore, where significant impacts were experienced at Indian Oil Corporation (₹14,330 crore) and Bharat Petroleum Corporation (₹7,230 crore). Full recovery is not expected despite efforts to secure compensation for LPG. Also, petrochemical integration pressures demand more investment under conditions of tight pricing freedom at this time. Such a scenario presents a painful possibility for OMCs via managing financial tightness and operational deferment.

Source: Business Standard