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Tag: Indian Oil

  • Indian Oil, Panasonic Ink JV for Lithium-Ion Cell Production

    Indian Oil, Panasonic Ink JV for Lithium-Ion Cell Production

    Indian Oil and Panasonic Energy are engaged in a feasibility study regarding the utilization of battery technology to facilitate the transition to clean energy in India, with the aim of finalizing details of their collaboration by the summer of this year…reports Asian Lite News

    Indian Oil Corporation Limited and Japan’s Panasonic Energy Co. Ltd., a Panasonic Group company, have signed a binding term sheet to form a JV for manufacturing cylindrical lithium-ion cells in India for two-and three-wheel vehicles and energy storage systems, the public sector oil giant announced on Sunday.

    Indian Oil and Panasonic Energy are engaged in a feasibility study regarding the utilization of battery technology to facilitate the transition to clean energy in India, with the aim of finalizing details of their collaboration by the summer of this year.

    The companies plan to invest in setting up a local manufacturing supply chain ecosystem for improving India’s self-reliance and fortifying the country’s position in the global energy landscape. This will also lead to creating demand for raw material sourcing within the country, enhancing domestic value addition and the growth of India’s battery industry in terms of highly efficient cell technology, Indian Oil said in a statement.

    The public sector oil giant said it aims to address environmental challenges, such as reducing CO2 emissions, through its partnership with Panasonic Energy. Leveraging Panasonic Energy’s expertise in battery development and manufacturing, both companies will strive to contribute to the growth of the lithium-ion battery industry and to India’s energy transition, while pursuing its mission of helping to build a sustainable society.

    Indian Oil also stated that it is aiming to achieve its net-zero operational emissions target by 2046, aligning with the country’s goal to achieve carbon neutrality for the country by 2070.

    In recent years, Indian Oil has actively engaged in the development of clean energy sources, including the utilization of solar power, biofuels and hydrogen, it added.

    ALSO READ-‘Crude Price Surge Puts Pressure on Indian Oil Companies’

  • ‘Crude Price Surge Puts Pressure on Indian Oil Companies’

    ‘Crude Price Surge Puts Pressure on Indian Oil Companies’

    The State-owned oil companies – Indian Oil, BPCL, HPCL – are expected take a hit due to soaring crude prices, according to Moody’s report.

    High crude oil prices will weaken the profitability of the country’s three state-owned oil marketing companies — Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) — as they have limited flexibility to pass on higher raw material costs to consumers due to the forthcoming Lok Sabha elections in May 2024, according to a report by Moody’s.

    The report points out that the market margins of the three oil companies — the difference between their net realized prices and international prices — have already weakened significantly from the high levels seen in the April-June quarter of the current financial year.

    Marketing margins on diesel turned negative since August while margins on petrol have narrowed considerably over the same period as international prices increased. 

    The earnings of the three OMCs, all of which enjoy a Baa3 stable rating, will weaken in the second half of fiscal 2024 if oil prices remain elevated at current levels of $85/barrel (bbl) – $90/bbl. Still, full-year earnings will remain comparable with historical levels at this price range, the Moody’s report states. 

    The OMCs, however, will start incurring EBITDA losses in the second half of fiscal 2024 if crude oil prices increase to around $100/ bbl.

    Nonetheless, we believe high oil prices are unlikely to be sustained for long as global growth weakens, the report adds.

    The increase in raw material costs comes after the price of crude oil jumped around 17 per cent to more than $90/bbl in September, from an average of $78/bbl in 1Q fiscal 2024.

    On the positive side the report states that the credit metrics of the OMCs will remain well positioned through fiscal 2024. The oil companies will maintain their credit quality, helped by strong balance sheets. Additional capital from the government, if made available, will further support their credit metrics.

    Among the three companies, HPCL has the lowest buffer to tolerate a material increase in crude oil prices because of substantial marketing losses in fiscal 2023 which resulted in borrowings, according to the report.

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