Oil Slick: Reliance and Other Indian Oil Companies Lose Heft in Fortune500 List

by GoNews Desk 2 years ago Views 5023

Oil Slick: Reliance and Other Indian Oil Companies
In the latest Fortune 500 Rankings released this month, Reliance Industries slipped 59 points on the Fortune 500 to reach 155th rank. Reliance posted a revenue loss of 25.3% in the year.

Of the other six Indian companies to make it to the global list, four lost their ranks while two ascended the table.   

Fortune500 Indian Cos Slip Ranking

The coronavirus pandemic had affected petroleum prices and demand globally and in India in 2020, and the effects are reflected in the rankings.

Petroleum-based companies have taken hits to their revenues as a result of slowdown caused by halting economic activities in factories, transportation, service sector, etc.

The demand for petroleum in India contracted by a huge 9.1%, a record slide since the year 2000. In April 2020, during the first and arguably most stringent lockdown, India’s fuel demand had fallen by almost 46%.  

The fuel consumption and demand were partially recovering but have been disrupted by the reimposition of lockdown in April 2021 as a result of the second wave surge. In May, the demand for fuel reached its lowest since August 2020 as travel and businesses were restricted yet again. Oil demand fell 11.3% from the previous month to 15.11 mn tonnes and was down 1.5% from last year.

Recovery of demand has also been impacted by the constant increase in retail prices of consumer fuel. Petrol is between Rs. 98 to 104 per liter in major metros. Oil Minister Dharmendra Pradhan has said that the fuel demand is expected to rise to pre-pandemic levels by the end of this year.

India is also the country with the second-highest coronavirus infections in the world at 31,769,132 cases, and it makes sense for the government to step up its preparation and treatment to contain the virus and stymie its economic impacts. 

 Here is a summary of the recovery of fuel demand in June:  

  • In June 2021, Petrol sales were 2.12 million metric tonnes. It was a 29.35% increase from May 2021, 5.66% increase from June 2020, and 10.39% drop from June 2019
  • In June 2021, Diesel sales were 5.36 million metric tonnes. It was an 18.51% increase from May 2021, 1.84% decrease from June 2020, and an 18.84% drop from June 2019
S.M Vaidya, Chairman of Indian Oil Corporation, India’s largest petroleum retailer, says that the demand for diesel will resume to pre-pandemic levels by Diwali in November this year.

However, the data for July shows that the demand recovery has been hampered by price rises, job losses, and lingering effects of the second wave lockdowns. Diesel and Petrol sales in July 2021 dropped 12.5% and 1% respectively over June. This is a drop of 21% and 11% respectively, taken against the previous July.

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