ONGC slips as govt likely to raise fuel subsidy burden

Shares of Oil and Natural Gas Corp (ONGC) fell over 6 per cent in early trade on the Bombay Stock Exchange (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 2010-11.

Following the reports, ONGC fell 6.1 per cent to touch a one-month low of Rs 279.35 on BSE. On the National Stock Exchange, the stock slipped 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 2010-11.

Other oil firms like Oil India and GAIL (India) were also trading under pressure. OIL fell 1.41 per cent to Rs 336.15, while GAIL went down 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 11.05 am.