ONGC tanks on subsidy buzz
As petrol and diesel prices touch an all-time high of Rs. 86.14 per litre and Rs. 73.31 a litre, respectively, in Mumbai, government is looking at alternative means to reduce the fuel prices. But the government is not willing to cut the excise duty and it may ask state-owned Oil and Natural Gas Corporation (ONGC) to bear fuel subsidy which may help retailers cut fuel prices.
In early 2015, the government had tried the same strategy to cope up with rising oil prices in the international market and managed to give some relief to consumers. ONGC was asked to sell oil to refiners at a discount.
A meeting on the subsidy sharing mechanism and an announcement regarding the same is scheduled for Saturday. According to news reports, there is already a minor reduction in the petrol and diesel prices, with prices at retailers down by 8 paisa and 6 paisa a litre, respectively.
On Friday, the stock of ONGC opened at Rs. 176.30 and touched a low of Rs. 170.70 reacting to the news. A total of 4.25 lakhs share were traded, leading to total turnover amounting to Rs. 7.34 crores.