Government asks OMCs to absorb fuel price hike; shares slump: Report

Government has reportedly asked the OMCs to absorb Re 1 per litre price hike of petrol and diesel.

New Delhi: Shares of Oil Marketing Companies (OMCs) slumped following reports that the government is asking these firms to absorb fuel price hikes.

Hindustan Petroleum Corp Ltd plunged over 7 percent, while both Bharat Petroleum Corp Ltd and Indian Oil Corp Ltd dropped over 5 percent.

Several media reports have said that government has asked the OMCs to absorb Re 1 per litre price hike of petrol and diesel.

India`s fuel demand rose 7.2 percent in March compared with the same month last year.

Consumption of fuel, a proxy for oil demand, totalled 18.62 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

Sales of gasoline, or petrol, were 14.2 percent higher from a year earlier at 2.40 million tonnes.

Cooking gas or liquefied petroleum gas (LPG) sales increased 8.8 percent to 2.06 million tonnes, while naphtha sales surged 2.7 percent to 1.13 million tonnes.

Sales of bitumen, used for making roads, were 5.8 percent up, while fuel oil use edged up 6.3 percent in March.

With Reuters Inputs