New Delhi,  After having a good run in most parts of the Covid-19 affected year, oil marketing companies may see an squeeze in their earnings in the October-December quarter of 2020-21 financial year.

OMC have had a good run in the first half of FY21 with higher inventory gains, fortunes may turn against the companies as lower oil prices in October and November months would result in inventory losses for companies such as IndianOil, Bharat Petroleum, Hindustan Petroleum. This even though, the companies continued to maintain good levels of marketing margin on dale of petrol and diesel.

"We estimate OMCs' earnings to be lower qoq due to a fall in refining inventory gains. Upstream would suffer due to a decline in gas prices. GAIL would benefit from higher LPG-petchem prices and improved LNG trading. GSPL would be affected by RIL's volume cut," an analysis done by Emkay Global Financial Services said.

The average Brent price rose 4 per cent qoq to $ 44.6/bbl in Q3 though closing higher at $ 51.2/bbl. The higher prices prevailed only on the month of December.

During the period under review, auto fuel marketing margins were also steady at Rs4-5/litre. Average rupee strengthened during the period while Domestic gas prices declined though spot LNG rates saw a sizable jump.

Q3FY21 witnessed further recovery in volumes as the economy continued to improve from Covid-19-led disruption. Oil product demand was slightly down yoy, while gas demand was back to normal. Refinery throughput improved but CNG volumes were down 8-10 per cent yoy.

According to the brokerage report, PLNG would see some seasonal decline in Dahej utilization. "IGL should report strong numbers as margins were steady and volumes up qoq. GGL's margins would be affected by a jump in spot LNG. RIL's earnings would be supported by an uptick in Retail and O2C," Emkay said in its report.