Petrol price hiked by `1.8/liter by Oil marketing companies (OMCs) ::Angel Broking,

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Petrol price hiked by `1.8/liter
Oil marketing companies (OMCs) have hiked petrol prices by approximately
`1.8/liter from November 4, 2011, as firm crude oil prices coupled with
depreciating rupee were resulting in higher under-recoveries (revenue losses) on
the sale of petrol. However, revenue losses on account of selling petrol at lower
prices formed insignificant proportion of the total under-recoveries. During
1HFY2012, oil retailers reported total under-recoveries of `64,900cr mainly on
account of selling diesel, kerosene and LPG cylinder at subsidized rates. As on
November 1, 2011, OMCs were losing `9.3/liter on diesel, `26.9/liter on
kerosene and `260.5 on every domestic LPG cylinder. Factoring in the recent
rupee depreciation, the hike in petrol prices is expected to have a insignificant
impact on overall under-recoveries. Hence, we continue to maintain our underrecoveries
estimates of `100,450cr for FY2012, which is primarily on account of
selling diesel, LPG cylinder and kerosene at subsidized prices. We maintain our
Buy ratings on ONGC and GAIL with target prices of `326 and `499, respectively.