Government asking oil firms to cut petrol, diesel prices by Rs 1 was ‘one-time thing’, says FinMin official

By: | Published: October 11, 2018 6:55 PM

Putting down concerns about the oil marketing companies (OMCs) being asked to cut petrol and diesel prices again, a Finance Ministry official said it was a ‘one-time thing’ which won’t be repeated again.

Petrol and diesel prices on 8 october 2018 in four metro cities, Petrol prices in delhi, diesel Prices in delhi, Crude Prices, Crude Oil latest updates, Petrol and diesel latest ratesJust after his comments the OMC share rose by nearly 19 percent intraday defying the broader market trends. (Reuters)

Putting down concerns about the oil marketing companies (OMCs) being asked to cut petrol and diesel prices again, a Finance Ministry official told PTI that it was a ‘one-time thing’ which won’t be repeated again.”The Re 1 absorption by OMCs in their pricing was a one-time thing,” the official said.The OMCs will continue to enjoy marketing freedom and won’t be asked to share the fuel subsidy burden by the government again, he told PTI. Recently, the oil firms were asked by the government to cut down fuel prices by Rs 1 to bring down the rising prices of fuel. The government itself took on the burden of Rs 1.5 excise cut on the guel prices.

However, most of the reduction that came into effect from October 5 got lost in hike in selling prices of petrol and diesel on subsequent days, triggering rise to the suspicion that the central government may once again ask the oil marketing companies to subsidise fuel.

Just after his comments the OMC share rose by nearly 19 percent intraday defying the broader market trends. The shares of HPCL rose 19 percent to touch a high of Rs 215.40,  BPCL climbed 7 percent to Rs 284.80 and IOC gained about 8 percent to Rs 134 in intra-day trade. The Sensex plunged 759.74 points to close at 34,001.

The reduction in the excise duty and oil marketing companies absorbing prices has resulted in the petrol price from an all-time high of Rs 84 per litre to Rs 81.50 in Delhi and that of diesel from record high of Rs 75.45 to Rs 72.95 a litre on October 5. However, price hikes on subsequent days have again pulled prices up.

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