Mumbai: Shares of oil marketing companies such as BPCL, HPCL and IOC, on Friday gained as much as 7 percent after the government hiked diesel prices by a steep Rs 5.63 per litre on Thursday.

BPCL rallied 6.87 percent to Rs 378.9, while HPCL gained 6.13 percent to Rs 327 on the BSE. IOC climbed 6 percent to Rs 269.9.

Analysts said the move would reduce the subsidy burden of oil marketing companies.

"This move is likely to have a short-term positive movement in stock prices of oil marketing companies," Angel Broking said in a report.

The biggest-ever hike of Rs 5 hike in diesel prices excluding VAT or local sales tax will make the commodity sell at Rs 46.95 per litre from on Friday in the national capital.

Diesel prices were last hiked by Rs 3.37 per litre in June last year.

The government also decided that each household will get 6 cylinders of 14.2-kg per annum at the subsidised rate of Rs 399 and any requirement beyond that would have to be procured at the market rate of Rs 746 per bottle.

Even after the hike and restrictions on LPG, the government will be left with an under-recovery of Rs 167,000 crore this fiscal which is more than Rs 138,541 crore of 2011-12.

 

(Agencies)

Latest News from Business News Desk