Rising global crude prices have sent domestic petrol and diesel prices to multi-year highs. The government was said to have informally directed state-owned fuel retailers not to raise petrol and diesel prices in the run-up to the December 2017 assembly elections in Gujarat.
We are structurally positive in OMCs despite rise in crude oil prices as there is lot of deep value available in the form of huge assets and its wide network and enjoys a strong moat as there is huge barrier to enter in this industry.
BPCL (down 2.10 per cent), HPCL (down 1.74 per cent), Indraprastha Gas (down 1.54 per cent) and Indian Oil Corporation (down 1.52 per cent) continued their fall on Thursday amid surging crude oil prices globally.
"No, we haven't heard from the government anything (on dropping daily price revision)", International Olympic Committee chairman Sanjiv Singh told reporters in New Delhi. On the other hand, HPCL has gone down by 8.3 percent in shares.
While Modi has reaped the benefits of the biggest price crash in a generation since coming to power 2014, oil is recovering as the government gears up for elections in 2019.
Oil marketing companies opened negative on the bourses. Petrol price continues to cost Rs 73.98 a litre in Delhi, the highest in four years, while diesel rate continues to rule at record levels of Rs 64.96.
The people, on the contrary, shared that an excise duty cut on rising fuel prices is unlikely due to the inefficient implementation of Goods and Services Tax (GST), and revenue collection. On Thursday, Brent crude futures were at $71.70 a barrel in recent trade, down 36 cents from their last close. Finance Secretary Hasmukh Adhia had last week ruled out any immediate reduction in excise duty to cushion the increases warranted from rise in global oil prices.