New Delhi, Feb 14: The Union government has decided to hike petrol and diesel prices by Rs two and Re one respectively. The hike will be effective from midnight Thursday night.
Shares of oil marketing companies got a significant boost after Petroleum Minister Murli Deora announced an Rs 2 per litre and Re 1 per litre in petrol and diesel prices respectively. Indias largest refinery Indian Oil Corporation (IOC) surged close to 10 per cent at Rs 516.70, Bharat Petroleum Corporation (BPCL) gained close to 7 per cent at Rs 447.55, while Hindustan Petroleum Corporation (HPCL) also added close to 10 per cent at Rs 282.70. This hike in fuel price will benefit oil companies by Rs 8.40 billion on value terms.
The government also decided to increase oil bonds, issued to offset losses of oil firms due to sale of fuel below cost price, to 56-57 per cent of the total under-recoveries from 42.7 per cent now.