(ET)
Indian Oil, Bharat Petroleum and Hindustan Petroleum will together lose Rs 4,500 crore in 2018-19 because the government has asked them to subsidise fuel, making investors and company executives nervous as the reversal of the bold reform in fuel pricing makes the companies vulnerable to bigger hits in the run up to the elections.
Price controls, earning cuts and forecasts that crude oil, currently at about $85, will soar above $100 in a few months, hammered the shares of oil companies on Thursday. Global oil prices are widely expected to rise as US sanctions choke supply from Iran, a major supplier to India. The annual impact of the government’s directive to Indian Oil, BPCL and HPCL to absorb one rupee on each litre of petrol and diesel is estimated to be Rs 9,000 crore, or a quarter of the three companies’ annual profit, executives said.
