Oil and gas stocks: High crude prices, weakening rupee pull down sentiment

For India's most valuable company, RIL may be seeing some softness in refining business due to decline in the benchmark gross refining margins

Thanks to rising crude oil prices and rupee depreciation, public sector oil and gas companies have seen heightened concerns on profitability, leading to a 7-19 per cent fall in their stock prices. The government’s recent decision asking the OMCs to absorb a part of retail price reduction (Rs 1 a litre impact on marketing margins of OMCs) has been looked by the street as a reversal of its stand on free pricing mechanism for petrol and diesel. Though the government has maintained that it is a one-time measure, investors will remain sceptical given upcoming elections as the government may intervene