BPCL and HPCL closed at 52-week lows on Friday. The stock of BPCL was down 14 per cent during the week to close at Rs 299 on the Bombay Stock Exchange, while HPCL weakened by 11.99 per cent to close at Rs 212.

The government outlined how the overall subsidy burden for the year - estimated at Rs 2,45,000 crore (Rs 2450 billion), assuming an oil price of $129 a barrel - would be shared between the companies and the government, accompanied by a hike in the price of diesel and LPG. "Considering that ONGC bears 85 per cent of the under-recoveries for the OMCs, the fuel price hike will keep ONGC's contribution at around Rs 40,000 crore (Rs 400 billion). This will not be as high as expected.

The share of support by the upstream companies to oil retailers will be lower in percentage terms in FY09. This has triggered an upward movement of the stock prices of upstream companies," said Kamlesh Kotak, Head Resarch, Asian Market Securities.

On Friday, the shares of ONGC closed at a weekly high of 12.65 per cent at Rs 938, with many research houses upgrading earnings estimates for ONGC. Among the oil marketing companies, HPCL was the top loser on Friday, weakening by 5.9 per cent, while Indian Oil Corporation (IOC) came off by 3.55 per cent to Rs 378.

"The shares of OMCs are down because despite the increase in fuel prices, these companies will still be making losses and the price hike will not boost their earnings significantly. Even after the hike in retail prices of auto-fuel and LPG, the OMCs will be short by about Rs 20,000 crore (Rs 200 billion) this year compared to Rs 16,000 crore (Rs 160 billion) in FY08," said a Delhi-based analyst.