A maturing market amid the mayhem
Oil & gas sector gains
The BSE Oil & Gas sector ended 2.2 percent higher on Monday, the first full day of trade after the government raised fuel prices as part of a plan to move towards a market-determined price regime.
The government freed up state-subsidised petrol prices and raised the prices of other fuels as pressure to trim a budget deficit seemed to outweigh concerns about its political impact.
Among state-run oil marketing companies, Indian Oil Corporation rose 5.4 percent, while HPCL and BPCL climbed 8 percent and 3.4 percent respectively.
Fuel accounts for a quarter of India’s estimated $25.6 billion subsidy bill. The hike in fuel prices could help reduce the fiscal deficit from the projected 5.5 percent of 2010/11 GDP and free up revenues for other programmes.
Do you think the deregulation of fuel prices will help oil stocks rise?