The shares of oil & gas sector companies rallied today soon after the announcement of the hike in petrol, diesel and LPG prices by the Empowered Group of Ministers.

The BSE Oil & gas index on BSE surged 2.88 per cent to close at 10,604.07.

Among the oil & gas scrips, HPCL surged 13.66% to close at Rs 401.05 along with BPCL soared 12.84% to Rs 621.35, IOCL spurts 10.39% to Rs 377.30, Essar Oil by 6.45% to Rs 137.75 and ONGC by 6.35% to Rs 1,264.

The EGoM today approved hike of Rs 3.5 per litre in petrol, Rs 2 per litre in diesel whule LPG cylinder prices hiked by Rs 35 per cylinder and kerosene prices were hiked by Rs 3 per litre.

The hike in these prices will come into effect from mid-night.

He added that the government will have the full authority to interfere if crude prices increase sharply.

In the meantime, no decision has been taken on duty on oil products.

The EGoM agreed to free diesel prices partially. However, petrol prices have been deregulated.

Earlier, the oil Minister Murli Deora has asked states like Delhi and Andhra Pradesh to lower sales tax (VAT) on auto fuels and shift towards specific rates in a bid to lower the impact of an unavoidable hike in petrol and diesel prices.