Shares of Indian Oil Corporation rose over 6% which is the biggest intraday gain since 25 January 2017 after the petrochemical company reported a 19.44% rise in the total income. The stock is also gaining since the morning trade as the government has asked all the state oil companies to keep increasing prices of subsidised kerosene by 25 paise every fortnight.
The stock of IOC surged 6.72% to the day’s high of Rs 395 on NSE. The shares of Hindustan Petroleum Corporation and Reliance Industries hit their 52-week highs on the back of kerosene subsidy elimination at Rs 407.5 and 1,664.9 respectively.
The state-owned Indian Oil Corporation today reported almost halving of its standalone net profit in the June quarter of the current fiscal, mostly due to drop in refining margins. The net profit in the April-June quarter stood at Rs 4,548.51 crore was 45% lower as compared to the net profit of Rs 8,268.98 crore in the same quarter of previous year.
The company earned $4.32 on turning every barrel of crude oil into fuel in the quarter as compared to $9.98 a barrel gross refining margin in the year-ago period.
Facing ire from opposition parties, the government is likely to put on hold its decision to authorise oil marketing companies (OMCs) to increase the effective price of liquefied petroleum gas (LPG) cylinders by Rs 4 per month in order to reduce and finally eliminate the subsidy burden.
However, OMCs will continue to increase the price of kerosene by 25 paise per month to completely do away with the subsidy on the fuel. According to a source close to the development, OMCs will continue the same course of action for LPG as was followed till now — increase or decrease the price depending on international prices.