Stocks of state-owned oil marketing companies (OMCs) like HPCL and BPCL tumbled up to 2 percent in the morning trade on June 8 amid reports that the government has asked them to reduce fuel prices on the back of lower global crude rates.
The companies have almost recovered losses and are nearing normalcy as evident in their positive quarterly results. As a result, the expectation is for the companies to lower the prices of petrol and diesel since they no longer face under-recoveries in these fuels, news agency ANI quoted a government source as saying.
At 10.05 am, Hindustan Petroleum Corp Ltd (HPCL) was trading 1.97 percent down at Rs 271.30, while Bharat Petroleum Corporation Ltd slipped 1.17 percent to Rs 364.25 and IOC dipped 0.12 percent to Rs 90.70.
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Global oil benchmark Brent crude was steady at $76.94 a barrel in Asian trade on June 8, as rising US fuel stocks and weak Chinese export data offset worries over Saudi Arabia's plans for deep output cuts.
OMC stocks posted smart gains in the previous session after Morgan Stanley said they will be able to surpass their pre-Ukraine war book values in the next two months, thanks to benign crude prices. The positive outlook was supported by the fact that marketing margins for these companies are reaching new highs.
Integrated margins in the marketing segment have reached their highest-ever level, as despite the decline in crude prices, petrol and diesel rates have not been reduced.
As a result, OMCs have benefited from higher marketing margins, which should help them recover from the losses incurred in Q3, it added.
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