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While the RIL stock has fallen 9 per cent following the Bombay high court order on KG basin gas pricing in the RIL-RNRL case, shares of oil marketing companies have seen a drop after they started making losses following a spike in crude prices in the global market and strengthening of the dollar. RIL saw the steepest decline of Rs 56,138.20 crore in market capitalisation, while Reliance Petroleum lost Rs 10,305 crore after the court order. The market capitalisation of ONGC fell by Rs 16,212 crore. ONGC has a public shareholding of 25.86 per cent.
In the post-election result market surge, the BSE oil and gas index had surged up to 24 per cent amid talks of a new oil pricing policy.
The stocks pared most of the gains after the spike in crude prices.
On Wednesday, crude prices were quoting at $69.02 a barrel, down from $72 barrel on June 11. Among other oil companies, IndianOil saw its market capitalisation fall by Rs 1,620.67 crore while BPCL and HPCL have added Rs 415.76 crore and 57.68 crore, respectively.IOC, BPCL and HPCL have public holdings of 19.65 per cent, 35.74 per cent and 48.89 per cent, respectively.
“The oil counters have taken a beating due to strengthening of the dollar against a basket of international currencies,” said Alex Mathews, head of research at Geojit BNP Paribus Financial.
The government is actively considering a hike in petrol and diesel prices in order to cut the losses of oil marketing companies.
“The fuel price hike will help reduce under-recoveries. However, its impact will depend on what mix the ministry chooses. If the price cut takes place in addition to the given oil bonds, only oil marketing companies stocks may surge. A small hike in fuel prices may not impact private refiners as it may not lead to any major structural changes,” said Deepak Pareek, oil and gas expert at Angel Broking.
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