Shares of state run, oil marketing companies (OMCs), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) have rallied up to 6% after the government raised the price of diesel by Rs 5 per liter from today.
For the oil marketing companies, the under-recoveries over selling the fuel at a subsidized rate stood at Rs. 2,05,000 crore.
“Diesel is one of the main contributors to a subsidy bill that economists warn could push the country's fiscal deficit above a target of 5.1% of gross domestic product (GDP),” a Reuters report suggests. Meanwhile, a cabinet committee also decided to limit the number of subsidized cooking gas cylinders per household to six per year. Any LPG cylinders bought over this ceiling will be at market rates, which could almost double the price.
Among the individual stocks, BPCL and HPCL have rallied 6% each at Rs 377 and Rs 325 respectively and IOC soared by 5% at Rs 258 on the Bombay Stock Exchange. ONGC and Oil India are also surged by 4% each.