Letter to BS: Govt's move to reduce fuel prices may hit oil companies

It was shocking to see the oil companies being asked by the government to bear a cost of Rs 1 per litre on petroleum products. By doing so, these companies will lose billions in market capitalisation and the shares may also fall by 35-55 per cent. Why did it happen? The government’s move is being seen by the market as walking away from the deregulated oil price regime. As a result, the companies will lose margins. The same objective would have been achieved if the Rs 2.5 reduction was by the Central government and its loss was compensated by high dividends from oil companies.

A Kumar, New Delhi

---

Letters can be mailed, faxed or e-mailed to: 

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  •  E-mail: letters@bsmail.in

All letters must have a postal address and telephone number