Fitch Ratings has today said, in a just published Special Report, that the upstream sector (i.e. exploration & production, or E&P) of India's Oil & Gas industry has a stable outlook but the outlook on the downstream business (i.e. refining & marketing, or R&M) is negative to stable; the negative outlook applies to public sector companies (PSCs), while the stable outlook is for private sector entities.
"While the outlook on the downstream PSCs has improved from H208, the negative overhang remains as net under-recoveries have accumulated again in FY10," said Abhinav Goel, Director with Fitch Ratings India. "The discretionary nature of oil product pricing and subsidy sharing, along with the lack of a well-defined mechanism for timely support are key reasons for the continued negative outlook on the PSC downstream sector," added Mr. Goel. The government has set up an expert committee in FY10 to advise on domestic fuel pricing issues, which has yet to submit its report. "Although a positive step, this is not likely to yield any meaningful results unless the major recommendations are implemented," Mr. Goel noted. Such committees have been established before, with few major price-related recommendations being implemented.
Full Story: Fitch sees -ve overhang in Indian oil & gas downstream biz - Moneycontrol.com
"While the outlook on the downstream PSCs has improved from H208, the negative overhang remains as net under-recoveries have accumulated again in FY10," said Abhinav Goel, Director with Fitch Ratings India. "The discretionary nature of oil product pricing and subsidy sharing, along with the lack of a well-defined mechanism for timely support are key reasons for the continued negative outlook on the PSC downstream sector," added Mr. Goel. The government has set up an expert committee in FY10 to advise on domestic fuel pricing issues, which has yet to submit its report. "Although a positive step, this is not likely to yield any meaningful results unless the major recommendations are implemented," Mr. Goel noted. Such committees have been established before, with few major price-related recommendations being implemented.
Full Story: Fitch sees -ve overhang in Indian oil & gas downstream biz - Moneycontrol.com
