Shares of oil marketing companies (OMCs) Indian Oil Corp, Hindustan Petroleum Corp, and Bharat Petroleum Corp fell over 2 percent to trade near day's lows on September 6, after a new report said cited sources that the government may consider reducing fuel prices, given the recent fall global crude oil prices.
Moneycontrol has not been able to independently verify the development.
Government is considering cutting prices of petrol and diesel, according to India Today TV, which cited unnamed sources. Following the report, shares of IOC, HPCL and BPCL fell, after having risen for the past two sessions.
International crude oil prices have fallen to their lowest level in nine months, in a likely boost to the profit margins for OMCs.
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"With Assembly elections in Maharashtra and Haryana approaching, the government sees this as an opportunity to offer relief to the public. Ongoing inter-ministerial talks are focused on how to best utilise the drop in global oil prices to benefit consumers, while also considering the financial health of OMCs," the India Today report said.
On September 4, a sharp decline sent Brent crude to $72/bbl, a positive for oil marketing companies that are hopeful of inventory gains by re-stocking at lower prices.
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Pressure on Brent prices is stemming from concerns of a demand slowdown in China - world's largest importer of crude oil - as well as a rising adoption of electric vehicles.
The prospect of resolution of the dispute that stalled Libyan crude production too adds pressure, on worries over excess supply. Expectations of higher OPEC+ production starting in October too have contributed to the downward pressure on crude oil.
Earlier in March, ahead of general elections, the government had reduced petrol and diesel prices by Rs 2 per litre.
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