OMCs could absorb hike in oil prices; shares down 6-8%
The government is unlikely pass on further rise in fuel prices to the consumers due to higher inflation.
Shares of oil marketing companies (OMCs) are trading under pressure, down 6-8 percent intraday Wednesday as the companies is likely to absorb increase in oil prices.
Government may ask the state run OMCs to further absorb the increase in oil prices, reports CNBC-TV18.
“The government is unlikely pass on further rise in fuel prices to the consumers due to higher inflation,” it added.
Also they are unlikely to roll back previous fuel excise duty hike due to fiscal constraints.
According to Morgan Stanley the higher rainfall & price surge slowed transportation fuel demand in August. But, it expects jet fuel and LPG to stand out on growth, but the overall industrial fuel demand remains lackluster.
Explainer: How Daily Revision Of Petrol, Diesel Prices Works
It maintains preference for Indian refiners IOC and BPCL.
At 15:10 hrs Indian Oil Corporation was quoting at Rs 417.45, down 3.98 percent, Hindustan Petroleum Corporation was quoting at Rs 457.65, down 5 percent and Bharat Petroleum Corporation was quoting at Rs 500.70, down 6.17 percent on the BSE.Posted by Rakesh Patil