New Delhi: The Centre on Thursday said the government asking state-owned oil marketing companies to subsidise petrol and diesel prices by Rs 1 per litre was a ‘one-time thing’ and it does not intend to ask them to do it again.
A senior finance ministry official said that while oil marketing companies will continue to enjoy marketing freedom, upstream oil producers like ONGC would not be asked to share fuel subsidy burden.
“The Rs 1 absorption by OMCs in their pricing was a one-time thing,” the official said. The government, he said, has no intention of asking them to do that again.
The official said the government is also not looking at bringing back the subsidy sharing mechanism where upstream firms like ONGC subsidised cooking fuels LPG and kerosene by giving discounts on crude oil they sold to refiners.
He said that the government expects the global crude oil prices to remain range bound and below $85 per barrel.
Finance ministry official expressed confidence that Indian economy stand to gain following US- China trade war.
The government had last week cut excise duty on petrol and diesel by Rs 1.50 per litre and had asked state-owned oil marketing companies (OMCs) to subsidise the two fuels by another Rs 1 a litre.
However, most of the Rs 2.50 per litre reduction in rates effected from October 5 has been lost due to increases in selling prices on subsequent days, giving rise to the suspicion that the government may again ask OMCs to subsidise fuel.
After the finance ministry’s statement, shares of OMCs surged by as much as 19 per cent intra-day, defying the broader market trends. Shares of HPCL surged 19 per cent to hit a high of Rs 215.40, BPCL jumped 7 per cent to Rs 284.80 and IOC gained nearly 8 per cent to Rs 134 in intra-day trade.
The benchmark BSE Sensex fell 759.74 points to close at 34,001.