Bharat Bandh sends oil firms' shares south

The nationwide strike called by opposition parties against the recent fuel price hike has reversed the northward journey of state-owned oil companies on stock markets.

Share prices of both upstream and downstream public sector oil companies fell up to two per cent on Monday.

Even Essar Oil, a private fuel retailer, fell 1.50 per cent on the Bombay Stock Exchange.

Hindustan Petroleum Corporation, a public sector oil marketing company, closed in red for the first time since June 25 when the government announced to decontrol petrol prices and raise prices of diesel, LPG and kerosene.

Of the 13 BSE sectoral indices, the oil and gas index fell the most (0.79 per cent) today even as the Sensex closed flat.

On June 25, the government hiked the price of petrol by Rs 3.50 per litre and diesel by Rs 2 per litre. It also increased the price of liquefied petroleum gas cylinder by Rs 35 and kerosene by Rs 3 per litre.

The all-India strike crippled the national economy and raised apprehensions that the government would revisit its decision on fuel price hike.

However, finance minister Pranab Mukherjee, who also headed the empowered group of ministers on fuel pricing, had earlier averred there would be no rollback of fuel price hike.

"There is no question of a rollback in fuel prices," Mukherjee told reporters on the sidelines of a conference in Kolkata yesterday.

In November 2009, the government was forced to revisit its sugarcane pricing policy after thousands of farmers gathered in the capital to protest changes in the policy, which sought to pass on the burden of higher sugarcane price to state governments.

Petroleum minister Murli Deora yesterday said the increase of Rs 3 per litre in kerosene translated into an increase of only Rs 0.50 per day per family.

The price increase of Rs 35 per LPG cylinder means an increase of less than Rs 1 per day per family.

The impact on the common man who used LPG and kerosene as domestic fuels was negligible and, therefore, the strike call was unjustified, Deora said.