The share prices of Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation, (BPCL) and Indian Oil Corporation (IOC) on Monday hit a 52-week low on the Bombay Stock Exchange (BSE).
"The slide in the share prices of public sector oil marketing companies is likely to continue further," said Sanjay Sinha, chief investment officer at SBI Mutual Fund.
The crude prices jumped by a massive $10 last Friday after the global financial major Morgan Stanley predicted that oil prices would reach $150 a barrel. The prices have touched an all-time high of $139 on Monday.
The investor sentiment towards domestic public sector oil companies, which reached its nadir since the colossal surge in crude from $100 in the past couple of months, has seen no improvement even after petrol and diesel prices were hiked by 10 per cent recently.
Analysts believe the government's much-delayed price hike announcement is nothing but a face saving measure.
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"The ad-hoc hike in petrol prices is not a long-lasting move and can do nothing for the loss making PSUs. If the government is really concerned, it should initiate stern, effective and transparent steps," said Sinha.
The duties on petrol and diesel have been cut to 2.50 per cent from 7.50 per cent and on other oil products to 5 per cent from 10 per cent.
The import duty on crude oil, which was 5 per cent earlier, has been scrapped. The government will shoulder a burden of Rs 94,601 crore, for which it will issue oil bonds to BPCL, HPCL and IOC.
According to market experts, the oil marketing companies are losing over Rs 500 crore daily due to high crude prices. Their under-recoveries in the current financial year are estimated at over Rs 2,00,000 crore compared to Rs 77,000 crore in 2007-08.
Other up-stream state-run oil companies such as Oil and Natural Gas Corporation (ONGC), Oil India and Gail are not favoured by analysts either. Oil India has put its initial offer on hold due to adverse market conditions. The company was planning to raise over Rs 4,000 crore.
The shares of HPCL slipped by 9.21 per cent at Rs 193, BPCL was down 7.09 per cent at Rs 278.40, ONGC declined 7.02 per cent at Rs 872, IOC fell 3.90 per cent at Rs 363 and Gail plunged by 1.99 per cent to Rs 376.