The Competition Commission of India (CCI) may soon carry out a detailed investigation into the alleged cartel-like behavior of oil marketing companies increasing and decreasing prices of petrol in unison.
After carrying out an initial enquiry on the matter, the CCI found that ‘there was no valid reason why OMCs – Indian Oil, Hindustan Petroleum and Bharat Petroleum – were increasing and decreasing price of petrol in unison, as the product was already decontrolled’.
“Prima facie evidence suggest that the case pertaining to cartel-like behaviour of OMCs, does deserve a more detailed examination by the office of the Director General (Investigations), and we will soon take a view on it,” PTI quoted a CCI source
The Commission is expected to make a final decision in this regard in the first fortnight of October.
Meanwhile, the oil marketing companies may also lower petrol prices as international crude has fallen to $106.74 currently from $116 five days earlier. Secondly, the rupee too has appreciated due to reform measures the government announced last week. On Friday, it touched a four-month high of 53.47 and has currently strengthened further to 52.10 against the dollar.
Even Nomura has upgraded the three public-sector oil marketing companies from ‘Neutral’ to ‘Buy’. “Although last week’s price change only helps a bit and the OMCs remain in dire straits, India’s government usually comes to the rescue near FY-end to ensure full-year profitability,” the brokerage said in a 22 September dated note.
Shares of HPCL are trading 1.42 percent higher, IOC is up marginally while BPCL is up half a percent in a volatile Mumbai market.