The government on Friday night hiked diesel price by Rs 3 per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre. The move was aimed to reduce the revenue loss of the companies by Rs 21,000 crore.
Shares of BPCL touched the month's high of Rs 687 (BSE), meanwhile, Hindustan Petroleum Corp (HPCL) touched the one-month high of Rs 416.55. The state owned Indian Oil Corp (IOCL) too shot-up to a month's high of Rs 360.
The mother of all exploration firm Oil and Natural Gas Corporation also touched the month's peak of Rs 297.40. Oil India and GAIL (India) were also trading on the upside.
Led by gains in these stocks, the BSE Oil & Gas index was trading up nearly 2% and was one of the top performer among the sectoral indices.
AK Hazaria, Chairman of ONGC said to the news channel, CNBC TV18, “The government has taken a two-pronged strategy by which they have also reduced their own revenue by reducing the duties of the various commodities as well as some of the burden have been passed onto the public by increasing the price of diesel, kerosene and LPG.
He further added that the subsidy calculation is yet to be defined by the EGoM (Empowered Group of Minister).
Hazaria said that upstream companies are expected to bear 33% in the first quarter, Of this ONGC will be sharing the burden by 82%.
On the follow-on-offer (FPO), Hazarika pointed towards the department of disinvestment. He also added here that since all directors have been appointed, hence the company is ready for FPO.