Oil stocks today surged as much as 6 per cent on hopes of a gradual hike in fuel prices.

Shares of HPCL gained 5.57 per cent to close at Rs 313.90, while BPCL was up 1.77 per cent at Rs 373.05 on the BSE. Besides, IOC rose by 3.82 per cent to Rs 281.45.

Buying was also seen in blue chip counters such as RIL and ONGC. ONGC gained 1.79 per cent, while RIL saw a marginal 0.02 rise.

Among others, Cairn India rose by 3.01 per cent, Oil India (2.21 per cent).

Led by gains in these stocks, the BSE oil and gas index moved up by 1.05 per cent to close at 8,856.29.

Market experts said these stocks gained following reports that the government might gradually increase the diesel price to cut subsidies.

“Expectations of rise in diesel prices triggered rise in oil retailers such as HPCL, BPCL and IOC. Other oil and gas stocks also saw buying interest,” Milan Bavishi, Head Research, Inventure Growth & Securities said.

The Kelkar Committee, which was appointed by finance ministry to suggest a roadmap for fiscal consolidation, has suggested immediate hike in fuel prices and complete deregulation of diesel prices by start of 2014-15 fiscal. It also suggested raising kerosene and LPG rates.

Meanwhile, the Oil Minister M Veerappa Moily said “The (Vijay Kelkar committee recommendation on deregulating diesel and raising kerosene and LPG rates) is a proposal. It is still at proposal stage. The (Petroleum) Ministry is only processing that report and we are yet to take a decision.”

The Sensex ended at 19,784.08, up 19.30 points.

(This article was published on January 4, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.