Indian Oil Corp., the nation’s biggest refiner, and its state-run counterparts fell in Mumbai trading after a report that the government would compensate 50 percent of their losses from selling fuel below cost, less than what the Oil Ministry is seeking.
The government will give 350 billion rupees ($8 billion) of bonds to state-run refiners to compensate for half the losses they incurred in the last fiscal year, the Financial Express reported today.
The government estimates refiners lost 770 billion rupees last year, Oil Minister Murli Deora said yesterday. The bonds should compensate for 57 percent of the losses, he said. India has capped fuel prices to curb inflation while oil has risen to a record $126.98 a barrel.
Indian Oil fell 9.7 rupees, or 2.3 percent, to 408 rupees at 10:52 a.m. local time.
Hindustan Petroleum Corp., India’s second-biggest refiner, fell 2.4 rupees, or 1 percent, to 233.35 rupees. Bharat Petroleum Corp., the third biggest, declined 4.25 rupees, or 1.2 percent, to 344.5 rupees.
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