Fuel price cut: Combined market capitalisation of OMCs sees 10% wipeout

Sharp impact likely on their earnings, with duty cut absorption to hit marketing margin

Investor sentiment got a major jolt with the central government telling the three state-owned oil marketing companies (OMCs) to absorb a Re 1 a litre cut in excise duty on petrol and diesel.

The share prices of Hindustan Petroleum (HPC), Bharat Petroleum (BPC) and Indian Oil (IOC) closed 10.6 to 12.2 per cent lower on Thursday, after also seeing their 52-week low. Their combined market capitalisation fell by Rs 298 billion or nearly 10.89 per cent of what it was at Wednesday’s close. HPC, being more sensitive to automobile fuel retail prices, since it has the highest proportion of sales