Oil companies shares tank 8% on reports government to ask to absorb Re 1/litre hike; HPCL, IOC, BPCL crash

Shares of almost all the oil marketing companies cracked in the late morning trades on the news reports that the government may ask the firms to absorb Re 1 per litre hike and pass on the maximum possible benefit to the customers. Shares of Hindustan Petroleum Corporation, Indian Oil Corporation, Bharat Petroleum Corporation shed up to 8% with scrips of other companies bleeding too. “Govt said to ask oil cos to absorb Re 1/litre price hike; Govt said to rule out excise duty cut to lower oil prices,” ET Now reported.

Shares of Hindustan Petroleum Corporation were the biggest losers among the pack of oil marketing companies. The stock of Hindustan Petroleum Corporation dropped 7.6% to a day’s low of Rs 337; Indian Oil Corporation plunged 7.41% to Rs 166; Bharat Petroleum Corporation crashed 7.03% to Rs 419.25; Chennai Petroleum Corporation plummeted 4.81% to Rs 333.5, Mahanagar Gas dipped 3.77% to Rs 908.9 and GAIL India dropped 2.88% to Rs 322.4 on BSE today.

Following the decline in the share prices of oil marketing and associated companies to oil and gas sector, the benchmark indices of public sector enterprises Nifty PSE and Nifty CPSE went down. Nifty PSE shed about 1.7% to 3,867.95 whereas Nifty CPSE edged down 1.2% to 2,418.65 on Wednesday. The energy sector indicator Nifty Energy fell as much as 0.8% to 13,512.3.

Indian government can always have a conversation with OMCs on pricing as the major shareholder as consumers have been asking for more transparency said Narendra Taneja, BJP spokesperson, Convenor Energy Cell said. The government has been doing the best to pass down any benefit from crude movement to the customers, Narendra Taneja said. Right now Finance Ministry is in no mood to discuss excise duty at this point as oil marketing companies have been asked to look into marketing margins, Narendra Taneja said further.