29th September,2011 Thursday
Sector impacts of fuel price hike
1. Oil marketing companies
Who gets to encash the price hike? It's none other than OMCs like IOC, BPCL, HPCL, who are the direct beneficiaries of the hike. The so called bad news for general public is excellent news for these companies in the short to medium term.
2. Banking and automobile companies
As fuel price hike news is a dampener for vehicle buyers (especially four wheelers), in the short run there is a decrease in the demand of luxurious and fuel inefficient vehicles. This decrease in demand in turn reduces the loan growth of banking sector
3. Alternative fuel companies
A company which produces alternative fuel sources like Indraprastha Gas Limited becomes hot favourites in such times. It's clear that conventional fuel prices are bound to increase in future; alternative fuel generating companies are going to be the winners in the long run.
4. Cement, steel companies
The sectors which are heavily dependent on transportation – and hence fuel oil -- are negatively impacted in short term especially during the rainy season as they are not able to pass on the additional cost to the customers because of reduction in demand.
Sector impacts of fuel price hike
1. Oil marketing companies
Who gets to encash the price hike? It's none other than OMCs like IOC, BPCL, HPCL, who are the direct beneficiaries of the hike. The so called bad news for general public is excellent news for these companies in the short to medium term.
2. Banking and automobile companies
As fuel price hike news is a dampener for vehicle buyers (especially four wheelers), in the short run there is a decrease in the demand of luxurious and fuel inefficient vehicles. This decrease in demand in turn reduces the loan growth of banking sector
3. Alternative fuel companies
A company which produces alternative fuel sources like Indraprastha Gas Limited becomes hot favourites in such times. It's clear that conventional fuel prices are bound to increase in future; alternative fuel generating companies are going to be the winners in the long run.
4. Cement, steel companies
The sectors which are heavily dependent on transportation – and hence fuel oil -- are negatively impacted in short term especially during the rainy season as they are not able to pass on the additional cost to the customers because of reduction in demand.
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