Shares of public sector undertakings (PSU) oil marketing companies (OMCs) such as BPCL, HPCL and Indian Oil have rallied up to 6% in morning trades on reports that the oil ministry proposes to hike diesel prices by less than a rupee per month, reduce subsidy and raise cap on cylinders.
Among the individual stocks, India Oil has surged 6.2% at Rs 288, followed HPCL (up 5% at Rs 312) and BPCL (up 3.3% at Rs 379), while ONGC and Oil India are up 2% each on the BSE.
“The oil ministry has moved two separate cabinet notes - one to raise cap on supply of subsidised cooking gas cylinders and the other to increase fuel prices, particularly diesel, by less than a rupee per month to pair it with market rates and eventually deregulate it in next 15 months,” according to the Economic Times report.
Meanwhile, the Business Standard report suggests, the petroleum ministry has asked the finance ministry to pay Rs 1 lakh crore while upstream oil companies such as ONGC, OIL and OMCs would share the rest of the burden.
According to the existing trade parity price method, OMCs are estimated to post a notional loss of about Rs 163,000 crore this financial year for selling fuel below the price prevailing in the international markets, added report.
