Oil marketing companies cut fuel prices; stocks gain

MUMBAI: Shares of oil marketing companies moved higher in trader as they cut retail petrol and diesel prices following a decline in global crude oil prices.

The price cut comes in less than two weeks after the government announced Rs 3.50 cut during Diwali. Petrol prices were lowered by Rs 2.40/ litre and diesel prices were cut by Rs 2.25/ litre.

According to analysts the marketing margins for the oil marketing companies are higher but most of the positives have already been priced in.

“Six-nine months ago, we were very constructive on OMCs but after the recent up move, most of these positives are already priced in,” said Gaurav Mehta, VP-Institutional Equities, Ambit Capital

“Plus a small risk for these oil marketing PSUs would be that because of deregulation, there might be a bit of incremental competition coming from private players. So to that extent, they are almost pricing the best case in, we think that risks are to the downside,” he added.

At 11:00 a.m.; the HPCL was up 1.14 per cent, IOC gained 1.11 per cent and BPCL was down 0.62 per cent.