The companies are apprehensive that their under-recoveries, the gap between the retail prices and their refining and marketing costs, will rise due to rising crude oil prices and the political constraints on the government to raise retail rates.
The Indian basket of crude oil, which tracks benchmark Brent crude, has averaged $69.17 a barrel in the current financial year. However, the global economic recovery, crude oil prices have been rising in the past few months. The average in February 2010 was $73.65 and, by the end of the first week of March, the average price of the Indian crude oil basket had already crossed $77 a barrel.
HPCL is the largest loser among the pack – shedding 3% to Rs 330, followed by BPCL (down 1.4%) to Rs 530 and IOC (down 1%) to Rs 303 on the BSE.
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