ONGC slips on buzz that govt increased fuel subsidy burden

Mumbai: Shares of ONGC fell by over 6 per cent in early trade on the BSE on Tuesday amid media reports that the government has increased upstream oil companies’ contribution toward fuel marketing firms’ subsidy burden to 38.5 per cent of the Rs. 77,922 crore estimate for FY’11.

Following the reports, Oil and Natural Gas Corporation (ONGC) fell by 6.1 per cent to touch a one-month low of Rs. 279.35 on the Bombay Stock Exchange (BSE).

On the National Stock Exchange, the stock slipped by 5.97 per cent to touch an early low of Rs. 279.20 apiece.

According to media reports, upstream oil exploration companies will have to contribute Rs. 30,000 crore to help compensate downstream fuel retailers for their subsidy burden in FY’11.

Other oil firms like Oil India and GAIL (India) were also trading under pressure. OIL fell by 1.41 per cent to Rs. 336.15, while GAIL went down by 2.36 per cent to Rs. 440 in early trade.

Meanwhile, the BSE benchmark Sensex was trading lower by 48.93 points at 18,296.10 at 1105 hours.