Govt unlikely to hike oil prices: Rajesh Jain, Market Strategist

Rajesh Jain, Market Strategist, in a chat with ET Now talks about oil and gas prices.

Good gains are coming in but does it seem like anything conclusive is going to come out this time around?

The upside that we are seeing today is because of Mr Murli Deora’s statement which raises hopes of a price hike in the petrol and diesel sales to consumers. But I suspect, given the inflation picture - we had a very bad inflation figure recently - I would be very surprised if the government were to bite the bullet and go ahead and again on crude. We have expectations that it could see a slightly lower level.

So as Dr Kirit Parikh was mentioning, the government might take that all too important decision once crude prices come down further and the impact is slightly negative. However, what is slightly positive is that there have been indications or there have been small messages sent out to state governments to bring down sales tax on fuels, which might help to mitigate the impact of an increase in the end consumer price.

So you have mixed signals out there but given the inflation picture, it is very unlikely that you will see a very sharp increase or any increase at all and let’s not forget that there are very few people who expect an immediate interest rate hardening as well. So the government might just let the economy roll-on as it is.