You might soon pay less for petrol and diesel, as the government seems to have swung into action to cushion consumers from the rising fuel bills. According to reports, the government has directed oil marketing companies to absorb a part of the losses on account of rise in crude oil prices.

The government has been receiving flak from the opposition and consumers alike for the sharp rise in petrol prices. After several appeals have been made to reduce petrol and diesel prices, the government has asked oil companies to absorb upto Rs1 per litre , following which shares of oil marketing companies fell down sharply.

On Wednesday shares of companies including Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) tanked up to 8 per cent on the National Stock Exchange. HPCL was down by 7.4% to Rs 337.5 while BPCL and IOC were down by 5.6% and 6%, respectively.

According to reports, IOC and HPCL clarified that they have not received any communication from the government for reducing oil prices and absorb the losses. Currently, crude is trading at four-month high, crossing $71 mark.

“I would advise not shorting the stocks of OMCs as of now, but this is not the time to dip into it even as valuations go lower. Investors should go for oil exploration companies and stay away from OMCs in the short-term,” said Ashish Maheshwari, Director – Blue Ocean Strategic Advisors to Zee Business.

Narendra Modi’s government wants to keep oil prices under control ahead of state elections this year. Experts say a cut in excise duty is unlikely at this point of time as revenue collections have already gone down on account of goods and services tax (GST).

Since coming to power in 2014, Modi government has been cushioned by low crude oil prices. The rates have now started moving upwards, which could be a cause of concern for the government, as general elections are scheduled for the next year. Crude prices hit a low of $ 27.1 per barrel in 2016, and it is currently trading at the level of around $70 level.