Shares of ONGC and Oil India rose by 2.34% to 3.53% on the BSE on reports the government is likely to give a nod to hike kerosene prices by Re 0.25 a litre per month till April 2017.<\/p>\n
ONGC (up 3.53%) and Oil India (up 2.34%), edged higher. <\/p>\n
On 1 July 2016, the government raised the price of kerosene by 25 paise a litre, the first time in five years.<\/p>\n
According to reports, the government has asked state-owned oil marketing companies (OMCs) \u2014 Indian Oil Corporation (IOC), HPCL and BPCL \u2014 to raise the price of subsidised kerosene by Re 0.25 a litre per month till April 2017 to bring it closer to the market-determined price.<\/p>\n
The move is expected to benefit state-run upstream oil companies like ONGC and Oil India as kerosene and LPG are sold well below their cost of production. Media reports suggests that currently, under-recoveries on kerosene and LPG are Rs 13.10 a litre and Rs 116 per cylinder, respectively. The government gives a subsidy of Rs 12 per litre on kerosene while the balance is borne by upstream petroleum companies such as Oil India and ONGC.<\/p>\n
The monthly kerosene price increase is similar to the path taken by the government to decontrol diesel price earlier. Petrol and diesel are sold at market-related rates following price deregulation.<\/p>\n
Among the OMCs, IOC, with more than 67% market share, will gain the most. ONGC and Oil India may undergo earnings upgrade of 1-1.5% for the next two years. A Re 0.25 hike would translate into a Rs 250 crore benefit for ONGC — nearly 1% profit for the company. Going forward, if there is a progressive hike of kerosene then that will wipe out the entire kerosene subsidy for these companies. This could mean Rs 1000 crore benefit to ONGC, reports added.<\/p>\n
In the past two fiscals, the government incurred under-recoveries of Rs 24799 crore and Rs 11496 crore on kerosene, reports suggested.<\/p>\n","protected":false},"excerpt":{"rendered":"
Shares of ONGC and Oil India rose by 2.34% to 3.53% on the BSE on reports the government is likely to give a nod to hike kerosene prices by Re 0.25 a litre per month till April 2017. ONGC (up 3.53%) and Oil India (up 2.34%), edged higher. On 1 July 2016, the government raised the price of kerosene by 25 paise a litre, the first time in five years. According to reports, the government has asked state-owned oil marketing companies (OMCs) \u2014 Indian Oil Corporation (IOC), HPCL and BPCL \u2014 to raise the price of subsidised kerosene by Re […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-76090","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/76090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=76090"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/76090\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=76090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=76090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=76090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}