IDEAS home Printed from
   My bibliography  Save this article

Commodity Risk – Petroleum Companies


  • Deepak Ukidave


Petroleum refining and marketing companies refine the crude oil procured from domestic and international sources to sell the finished products in Indian Market. The price of crude oil is very volatile and so is the case with the price of petroleum products. Since, prices of both crude oil and petroleum products are used to calculate refining margin, we can say that petroleum refining and marketing companies are exposed to risks from volatility in refining margin. Refining margin has a direct impact on the profitability of the company. Thus, profit margin fluctuates with the fluctuations in the refining margin. This impact can be minimized using derivative instruments like futures, options and swaps. In the first half of this report, we have quantified the impact of volatile commodity prices on refining margin and in the second part, we have discussed various hedging instruments and strategy to reduce this impact.

Suggested Citation

  • Deepak Ukidave, 2004. "Commodity Risk – Petroleum Companies," The IUP Journal of Financial Economics, IUP Publications, vol. 0(3), pages 41-71, September.
  • Handle: RePEc:icf:icfjfe:v:02:y:2004:i:3:p:41-71

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:icf:icfjfe:v:02:y:2004:i:3:p:41-71. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G R K Murty). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.