Petrol, diesel fuel prices hiked 17p, 21p respectively, HPCL, BPCL, IOC share prices rally 4%

HPCL, BPCL, IOC share prices gained up to 4 per cent as the oil marketing companies hiked petrol and diesel prices for the first time since April 24 after teh conclusion of the Karnataka election voting. Petrol price was today hiked by 17 paise a litre and diesel by 21 paise as PSU oil firms began passing on the spike witnessed in international rates to consumers. 

HPCL share price rallied nearly 4 per cent to Rs 330.05 on the BSE. IOC share price gained 2.39 to Rs 173.45, while BPCL share price added 2.67 per cent to Rs 410.05. On a year-to-date basis, the stocks fell up to 23 per cent as investors feared no hike in oil prices in tandem with global oil prices will create margin pressure on PSUs.   

Petrol price in Delhi was hiked to Rs 74.80 per litre from Rs 74.63 while diesel rates were increased to Rs 66.14 a litre from Rs 65.93. With this, diesel prices have touched a record high while petrol is at a 56-month peak.

State-owned oil marketing companies are estimated to have lost about Rs 500 crore as they absorbed higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar, reported PTI. 

Oil PSUs, which have been since June last year revising auto fuel prices on a daily basis to reflect changes in the cost, have kept pump rates static since April 24, an analysis of daily price notification issued by oil companies showed. 

Indian Oil Corp (IOC) Chairman Sanjiv Singh last week said that the state-owned firms were "temporarily moderating" prices to avoid sharp spikes and panic among consumers. 

The prices were frozen despite benchmark international rate for petrol going up from $78.84 per barrel, which was used for raising the price to Rs 74.63 a litre on April 24, to $82.98 now, according to sources privy to fuel pricing methodology. 

The benchmark international diesel rates during this period have climbed from $84.68 per barrel to $88.63. Also, the rupee has weakened to Rs 67 per US dollar from Rs 66.62, making imports costlier. 

State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. 

If this practice was followed in letter and spirit, petrol and diesel prices should have been increased by Rs 1.5 a litre in last 19 days, an analyst tracking the sector told PTI.