Shares of the IOC, BPCL, and HPCL tumbled on the news that government may ask the oil marketing companies to absorb further increase in global crude oil prices. The stock of the nation’s largest company Indian Oil Corporation fell as much as 6.2% to the day’s low of Rs 408; shares of another state-run refiner Bharat Petroleum Corporation plunged 8.4% to the day’s low of Rs 489. Shares of Hindustan Petroleum Corporation lost 8% to the day’s low of Rs 443.7.
As the petrol and diesel prices have hit three-year highs in some cities, the government seems to have swung into action to protect the consumers from the rising fuel bills, possibly bringing back the ghosts of the era of regulation.
Not only is the government assessing the trajectory of oil prices, it may ask the oil marketing companies to absorb further increase in global crude oil prices, news channels ET Now and CNBC TV18 reported on Wednesday citing unidentified government sources. The government is unlikely to pass further rise in fuel prices due to higher inflation, the reports added.
The possible government intervention to keep the retail fuel prices in check comes after the news reports highlighted that the petrol and diesel prices have risen to the levels last seen three years ago in metro cities of Mumbai, Kolkata and Chennai, only, without the people noticing it much this time.
The petrol in Mumbai has risen to Rs 79.48 per litre, a level last seen in August 2014 in the country’s financial capital. Similarly, the price of diesel is at a three-year high in the metro cities of Kolkata and Chennai at Rs 61.37 and 61.84 per litre respectively. Retail fuel prices are on a steady up move, rising in small doses almost every day since the introduction of the dynamic fuel price revision mechanism nationwide in June this year.