Indian SOE Oil Companies-- Gasoline prices increased :JPMorgan

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 Gasoline prices raised 5%: Domestic retail gasoline prices have been
increased by Rs3.14 (5%) following the sharp increase in retail level
losses in gasoline due to elevated crude levels and rupee depreciation
(8% since August). Gasoline prices were 'decontrolled' in June 2010, but
given government scrutiny on fuel price rises this will be positive for
sentiment on SOE oil companies even though it is not a reform initiative.
 Reform focus will be on direct targeting of LPG, Kerosene subsidy:
Government reform focus is likely to be on direct targeting of cooking
fuel subsidies. While curtailing number of subsidized LPG cylinders to
households could be implemented through dealer networks, kerosene
subsidy will require a stronger database and would be dependent on the
UID scheme – as a result we do not see any large-scale implementation
of these schemes in the near term.
 18-190% increases needed to align fuels to market levels...: With the
sharp depreciation of the rupee, the government would need to raise
diesel prices by Rs8.2 (18%) to reflect market levels of crude. The
increase in LPG and Kerosene would need to be Rs243/cylinder (61%)
and Rs26.7/ltr (190%).
 …but inflation remains a stumbling block for reforms: We do not
believe any significant moves on rationing LPG cylinders, or increasing
diesel prices will come through in the light of the sticky inflationary
environment. A 10% rise in diesel would affect inflation by 75-80bp. We
stay cautious on the SOE oil companies.