The government has announced | 2.5 per litre reduction in petrol and diesel prices to lower the burden on customers due to rising crude oil prices. The central excise duty has been cut by | 1.5 per litre while oil marketing companies (OMCs) have been asked to absorb a cut of | 1 per litre. This move by the government will have a substantial impact on the profitability of OMCs with BPCL and HPCL profits declining ~28% and ~39%, respectively on an annual basis. The current action by the government has put a question mark on the free pricing mechanism for petrol and diesel by OMCs. This...