IOC, BPCL, ONGC, BPCL gain on proposal of diesel price hike

NEW DELHI: Oil companies such as Indian Oil Corporation, BPCL, ONGC and BPCL were trading higher on reports that the petroleum ministry has proposed a gradual rise in diesel prices, by 1 per litre every month over a 10-month period.

“The ministry's timetable for a rise in kerosene prices is even more glacial, 10 per litre over a two-year period,” ET reported.

At 10:05 am, IOC was trading 2.4 per cent higher at Rs 267.25, BPCL advanced 4.2 per cent to Rs 360, HPCL moved 3.2 per cent higher at Rs 290.15 and ONGC was up 2.6 per cent to Rs 265.70.

“We expect the gov't to finalize a decision in this regard in late Jan or early Feb prior to the union budget in late Feb,” research firm Kim Eng said in a report.

The government last increased fuel prices in September, following which the auto sector has been hit hard.

The under-recovery on subsidised diesel is 9.28/litre. Prices of diesel, which currently costs 47.15 per litre in Delhi, were last revised on September 14 when they were raised by a steep 5.63 per litre, provoking massive protests.

On Thursday, Prime Minister Manmohan Singh asserted the need for right-pricing of energy and phased adjustments in prices while inaugurating the National Development Council meeting, but Planning Commission officials said the statement should not be linked to any immediate action.

"That (increase in price) will be decided by the government after reaching a political consensus on the issue," said commission member BK Charurvedi.