CLSA said there is a need for another 5-6 percent hike in fuel prices after recent 3 percent hike by oil marketing companies.
Oil retailers share prices corrected up to 7 percent intraday Wednesday after HPCL chief doesn't expect crude to fall below $70 a barrel in short term and global brokerage firm CLSA expects macro risks in election-heavy FY19 to keep buyers away.
Indian Oil Corporation rallied 5.7 percent, Hindustan Petroleum Corporation 7 percent and Bharat Petroleum Corporation jumped nearly 7 percent intraday.
MK Surana, Chairman and Managing Director of HPCL said he is happy to see oil prices in the range of $60-70 a barrel, but he does not see any trigger for oil prices to cool down to $70 a barrel over the next 2-3 months.
Retail fuel prices are linked to international petroleum product prices. Brent crude futures, the global benchmark for oil prices, touched $80.50 a barrel, the highest since November 2014, in the last week.
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The oil prices shot up more than 77 percent from the level of $45 a barrel traded in June 2017. The Brent futures dropped 0.52 percent to $79.21 a barrel, after climbing 35 cents on Tuesday, at 12:10 hours IST.
Surana said he has no information on oil marketing companies meeting on fuel prices.
Meanwhile, BJP president Amit Shah on Tuesday said the government is taking the issue of rising petroleum prices seriously and will soon announce measures to deal with the matter. "The government at the highest level is concerned about it and is taking the matter seriously," he said, adding it will come out with a solution in three-four days.
He told a press conference that Petroleum Minister Dharmendra Pradhan is meeting representatives of oil companies and that he is hopeful that a solution will be worked out soon.
More than a week after the state-owned oil firms ended a 19-day pre-Karnataka poll hiatus on revising fuel prices, petrol and diesel rates have touched record highs.
Petrol price increased by 29 paise to Rs 84.99 per litre and diesel price by 28 paise to Rs 72.76 per litre in Mumbai last midnight.
CLSA said there is a need for another 5-6 percent hike in fuel prices after recent 3 percent hike by oil marketing companies.
In particular for HPCL, CLSA has reiterated its Sell call on the stock as concern about its marketing margin may continue and macro risks in election-heavy FY19 will keep buyers away.
At 11:51 hours IST, the stock price was quoting at Rs 153.80, down 4.80 percent, Hindustan Petroleum Corporation was down 6.28 percent at Rs 292.50 and Bharat Petroleum Corporation down 5.74 percent at Rs 374.50 on the BSE.