Shares of oil marketing companies, HPCL, BPCL and IOC tanked after finance minister Arun Jaitley on Thursday said they will absorb Re 1 per litre cut on petrol and diesel.

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Shares of HPCL, BPCL, IOC slumped by up to 21 percent after Jaitley's announcement.

HPCL shares tanked more than 20 percent to end at Rs 199.90. It hit a 52-week low of Rs 192.25.BPCL shares also hit its 52-week low of Rs 303.85, eventually settling at Rs 306.50, falling by 18.88 percent at close.

IOC shares also plunged 18.24 percent to end at Rs 129.50, after touching its 52-week low of Rs 126.75.

Jaitley announced additional excise cut by Rs 1.5 per litre on fuels which will be borne by the government. The total benefits to consumers will come around Rs 2.5 per litre on both petrol and diesel.

The government will lose Rs 10,500 crore because of the excise cut, Jaitley added in his briefing.

By lowering duties, the Narendra Modi government is borrowing a page from the rulebook of past governments that have lowered levies whenever international oil prices shot up. Since the government came to power in May 2014, it has used tax increases on petrol and diesel prices to raise funds for welfare programmes.

But growing public anger over surging fuel prices has caught the attention of the government. Opposition parties have launched strikes and protests across the country over the issue.

India is the world’s third largest oil consumer, importing about 80 percent of its energy needs.

Meanwhile, equity market ended sharply lower with the BSE Sensex nosediving more than 800 points, or 2.24 percent, to end at 35,169. The NSE Nifty50 ended at 10,599, sharply down by 259 points, or 2.39 percent.

First Published:Oct 4, 2018 3:46 PM IST