Hike in fuel price lifts OMCs

The government hiked the price of diesel by Rs3 a litre, kerosene - Rs2 a litre and cooking gas by a steep Rs50 a cylinder. This followed the hike of over Rs5 per litre on petrol announced by oil marketing companies ( OMCs) in mid-May.

The decision to raise fuel prices was inevitable in view of the rising crude prices in the global market and its impact on the fiscal deficit

The impact on inflation is inevitable as the government did not have any other option but to hike the prices in light of huge under-recoveries.

The price hike would help the oil companies limit their revenue loss by Rs21,000 crore, but they would still end the fiscal with about Rs121,704 crore of revenue loss.

State-run oil marketing companies Indian Oil Corporation ( IOC), Bharat Petroleum Corporation Ltd ( BPCL) and Hindustan Petroleum Corporation Ltd ( HPCL) would benefit from increase in fuel prices. The shares of OMCs witness good buying interest.

At 9.26 am, BSE Oil & Gas was the leading index, up 1.23% at 9154.

HPCL was trading at Rs410.05, up by 4.47%, with a volume of 1.41 lakh shares on the BSE.

BPCL was trading at Rs663.65, up by 4.61%, with a volume of 1.14 lakh shares on the BSE.

IOC was trading at Rs349.55, up by 3.69%, with a volume of 0.92 lakh shares on the BSE.