Shares of oil marketing companies fell today while those of auto makers rose reacting to petrol price cut news.
State-run oil companies cut petrol prices by Rs 2.46 (excluding tax) per litre, as a fall in international crude oil prices gave them room to reduce local prices.
Oil companies’ retail margin on petrol has increased to nearly Rs 5 per litre, as global prices continued to fall, the Business Standard reported earlier.
The cut in prices would result in a squeeze of this, as there has not been an offsetting increase in diesel price.
On the other hand, auto makers have been clamouring for a cut in petrol prices to tide over an impending sharp slowdown in sales. The companies have already taken measures to reduce production.
Car sales in India rose just 2.8 percent in May, according to data from the Society of Indian Automobile Manufacturers.