OMCs jump up as fuel prices rise
It is after a long gap that oil marketing companies, HPCL and BPCL are today figuring out in the top gainers list. HPCL is up Rs.20 at Rs.810.80 and BPCL is up Rs.21 at Rs.907.65. Indian Oil Corporation is also in the green, up by around Rs.8 at Rs.409.
It is reacting to petrol price being hiked, which had happened last month too. Effective from mid-night yesterday petrol prices have been raised by Rs.2.19/litre and that of diesel by 98 paise/litre.
Before this, prices were hiked on March 17th of both petrol and diesel. This is in fact the third hike since February. As such these companies review their prices every fortnight, on the 1st and 16th of every month, taking into account the average oil price over the 15 days and rupee-to-dollar rate. Thus the change was to have happened on 2nd and it is happening now.
The price hike is sure to boost the bottomlines of these OMCs as they are sure to have contracted their fuel purchases at much lower rates.
Companies are so quick to pass on rate hikes but move like a snail when it comes to reducing! The price hike at this juncture is suprising given that oil prices are actually down currently and the rupee vis-vis the dollar has been reselient.