Oil and gas stocks slump on rising crude prices, sliding rupee

Oil India, HPCL and BPCL fell between 5-7%

Shares of oil and gas companies declined in the opening trades this Wednesday on concerns over higher under recoveries after crude climbed to a six-month high while rupee breached the 67-a-dollar mark, hitting another life-low.

Oil India, Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) fell between 5-7%.

With the rupee hitting life lows, the under-recovery on sensitive petroleum products in 2013-14 is set to exceed last year's Rs 1,61,029 crore. On Wednesday, Brent crude fell to $117.14 a barrel.

Oil marketing companies had reported Rs 25,579 crore of underrecoveries during the first quarter of this financial year. As of August 16, these firms were, on a daily basis, losing a combined Rs 389 crore on sale of sensitive petroleum products.

Investors were also concerned by the reports that the US and other Western powers could be considering a military action on Syria, holding President Bashar al-Assad responsible for a chemical-weapon attack in Damascus.

The rise in Brent crude prices is alarming for India, which imports chunk of oil from Middle Eastern nations.

At 9:35AM, Reliance Industries, the owner of world’s biggest refining complex, fell 2.7 oer cent while ONGC slumped 6 per cent on the BSE on concerns of a higher subsidy outgo.