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Stocks of three state-owned oil marketing companies (OMCs) tanked by as much as six per cent on Wednesday following reports that the government was mulling placing curbs on their newly acquired powers to determine transport fuel prices on a daily basis.
According to market observers, the slide in OMC scrips followed reports that the government proposed to curb the pricing powers of OMCs in view of the steep hike in the cost of petroleum products over the past almost three months, even though international crude oil prices have remained stable.
The selling pressure in OMCs' stock prices also dragged the benchmark indices -- BSE Sensex and NSE Nifty -- lower.
"Most Indian equity benchmarks declined as shares of oil marketers sold off on reports that the government may ask these companies to absorb fuel price increase," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
"Oil marketing companies (OMCs) such as BPCL (Bharat Petroleum Corporation Ltd), HPCL (Hindustan Petroleum Corporation Limited) and IOC (Indian Oil Corporation Ltd) tanked as much as eight per cent following news reports that the OMCs may be told to absorb increase in oil prices due to inflation risks."
Company-wise, BPCL scrips went down by 6.23 per cent to Rs 500.35 during the day's trade. The IOC scrip dipped 4.28 per cent to Rs 416.15 and that of HPCL was lower by 5.06 per cent to Rs 457.35.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)