OMCs suffer to bring down petrol, diesel prices

The central government on Thursday brought down petrol and diesel prices by Rs 2.50. For the same, the government has asked oil marketing companies (OMCs) to absorb Re. 1 per litre to bring down fuel prices. 

Reacting to this news, OMC stocks started falling in the afternoon and tumbled more than 10 per cent as Finance Minister Arun Jaitley made the announcement in the closing hours of trade. 
Jaitley said that the centre will cut Rs 1.50 in excise duty on fuel, while an additional Re 1 which will be absorbed by the Oil Marketing Companies. The FM has also urged the state governments to cut the VAT on fuel by an equal amount to further bring down the prices, which if done, will reduce fuel price by Rs. 5 for consumers. 

Responding to the FM’s call, the state governments of Maharashtra and Gujarat have announced an additional cut of Rs 2.50 per litre.

As a result, stocks of the OMCs tanked. State-owned OMC, BPCL closed below 10 per cent at Rs 336.35 per share, IOC closed at Rs 140 per share down by 10.57 per cent, HPCL went down 12 per cent to Rs. 336.35 per share on the BSE. Also, RIL was down by 7.03 per cent and closed at Rs.1,120.55 per share on the BSE.  
At closing on Thursday, BSE Sensex was in a sea of red at 35,169 level, down by 806.47 points or 2.24 per cent.