ONGC takes a hit on equity investment in HPCL, Indian Oil over fuel subsidy

There has been a sharp fall in the share price of OMCs in the last 2 days after the govt announced that they would have to absorb subsidy on diesel and petrol

Public sector energy major Oil and Natural Gas Corporation (ONGC) has turned out to be the biggest loser in the central government's latest fuel subsidy policy.   

The government's decision to ask state-run oil marketing companies (OMCs) to share part of the subsidy has not only hit the ONGC stock, but it has also affected the value of its investment in companies like Indian Oil, Hindustan Petroleum Corporation (HPCL), and Gail (India). Shares of ONGC declined about 17 per cent this week.

ONGC's investment in HPCL has lost 65 per cent in market value compared to the cost of investment,