www.rupeedesk.in
Stocks of state-owned oil marketing companies are seen trading in a range next week amid lack of near-term triggers, while those of Reliance Industries Ltd could track the ongoing court case over KG-D6 output and gas pricing.
The broad market will mostly track Jan-Mar earnings and US Federal Open Market Committee's two-day meet starting Tuesday. The rupee has been in a range against the dollar over the past few weeks, while crude prices have also remained significantly below $110 a barrel, which is a big relief for Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd.
The companies' losses on subsidised fuel sale are likely to be sharply down in 2014-15 (Apr-Mar) because of stable oil prices, and rupee-dollar rates apart from the sustained increase in diesel prices. The three companies together incurred a loss of 1.41 trln rupees on subsidised fuel sales in 2013-14. The oil ministry yesterday demanded 240 bln rupees from the finance ministry as subsidy to part-compensate the revenue losses faced by these companies in Jan-Mar and 410 bln rupees for the full year.
The actual amount will determine the financials of the three companies when they report their earnings late next month. Usually the government pays up most of these losses to help these companies report profit on an annual basis.
However, the concern now is on diesel pricing, as the companies did not increase prices this month and may not do so next month too. There is now uncertainty over whether the new government will allow continuation of the monthly price hikes that has resulted in substantial reduction in revenue loss of these companies.
On the other hand, Reliance Industries is fighting it out with the government in the Supreme Court and is now seeking an even higher price than the $8.2 per mBtu under the new formula. The company has also expressed unhappiness over the proposal of an audit of the KG-D6 block by the Comptroller and Auditor General. The case will continue to be heard on Monday.
The outcome could have some bearing on the stock, though the court may take some more time to pronounce its order. Meanwhile, it could remain an overhang on the RIL stock, which is seen mostly in range.
Stocks of state-owned oil marketing companies are seen trading in a range next week amid lack of near-term triggers, while those of Reliance Industries Ltd could track the ongoing court case over KG-D6 output and gas pricing.
The broad market will mostly track Jan-Mar earnings and US Federal Open Market Committee's two-day meet starting Tuesday. The rupee has been in a range against the dollar over the past few weeks, while crude prices have also remained significantly below $110 a barrel, which is a big relief for Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd.
The companies' losses on subsidised fuel sale are likely to be sharply down in 2014-15 (Apr-Mar) because of stable oil prices, and rupee-dollar rates apart from the sustained increase in diesel prices. The three companies together incurred a loss of 1.41 trln rupees on subsidised fuel sales in 2013-14. The oil ministry yesterday demanded 240 bln rupees from the finance ministry as subsidy to part-compensate the revenue losses faced by these companies in Jan-Mar and 410 bln rupees for the full year.
The actual amount will determine the financials of the three companies when they report their earnings late next month. Usually the government pays up most of these losses to help these companies report profit on an annual basis.
However, the concern now is on diesel pricing, as the companies did not increase prices this month and may not do so next month too. There is now uncertainty over whether the new government will allow continuation of the monthly price hikes that has resulted in substantial reduction in revenue loss of these companies.
On the other hand, Reliance Industries is fighting it out with the government in the Supreme Court and is now seeking an even higher price than the $8.2 per mBtu under the new formula. The company has also expressed unhappiness over the proposal of an audit of the KG-D6 block by the Comptroller and Auditor General. The case will continue to be heard on Monday.
The outcome could have some bearing on the stock, though the court may take some more time to pronounce its order. Meanwhile, it could remain an overhang on the RIL stock, which is seen mostly in range.
