The government on Saturday sought to comfort jittery stock market investors with finance minister Arun Jaitley assuring them on maintaining a deregulated regime for petrol and diesel prices.
Investors have hammered shares of state-run oil marketing companies after the government announced that the refiners will reduce prices of the auto fuel by Re 1 a litre along with a reduction in excise duty by Rs 1.5 a litre. On Friday, IndianOil shares closed 16% lower after an over 10% fall on Thursday. Similarly, HPCL tanked 25% on Friday, while BPCL lost 21%. ONGC, which holds a majority stake in HPCL and also owns stake in IndianOil, fell almost 16% on Friday.
In a blog, Jaitley suggested that the special situation due to a spike in global crude prices, along with a weaker rupee, called for a price reduction. “No government can be insensitive towards its people,” the minister wrote, while hitting out at the opposition-ruled states that had not reduced the state VAT even as those where BJP was in power had matched the Centre and reduced the levies. Read more