BPCL, HPCL fall on Moily's hint at 'no diesel price hike'

Moneycontrol Bureau

Oil marketing companies are under heavy selling pressure as Petroleum Minister Veerappa Moily said that there are no immediate plans for a one-time diesel price hike. Shares of BPCL, HPCL and IOC are down between 1-4 percent in intraday trade on Wednesday.

Moily said that the dual-pricing of diesel is not worrying. "At present the state transport undertakings (STU) are purchasing diesel at market real prices without any subsidy. STU's will purchase diesel at the subsidised rate and will be in a need to encourage public transport, but this would be subject to their active corporation in our conservation campaign," he said.

Disappointed RS Sharma, Former Chairman of ONGC feels that the announcement could be outcome of a political compulsion. "We have seen that Moily off late has been constantly talking of the reforms coming and better stability, better comfort for these oil PSUs. I can understand the statement could be the political compulsion that may have an overriding effect again on the economic agenda but surely for the industry, it is not a very welcome announcement coming from the minister," Sharma said in an interview to CNBC-TV18.

Meanwhile another overhang on the OMC stocks are the concerns of the export-parity pricing (EPP). Sources told CNBC-TV18 that the Kirit Parikh panel may recommend EPP for diesel, which may wipe out Rs 3000-4000 crore.

At 12:02 hrs BOCL was at Rs 302.70, down Rs 13.15, or 4.16 percent, HPCL was at Rs 188.15, down Rs 5.75, or 2.97 percent while IOC was quoting at Rs 216.40, down Rs 2.95, or 1.34 percent on the BSE.

(Posted by Nasrin Sultana)