The shares of major oil marketing firms in the country fell today following indications that the government has given in-principle approval to plans for the adoption of export parity pricing model for petroleum products.

It is believed that Oil Minister Veerappa Moily has given an in-principle approval to the plan for using the model for pricing fuel in the country but a final decision is yet to me taken on the matter. Moily said that the government will take a final decision on the pricing mechanism after former Planning Commission member Kirit Parikh gives his recommendation on the matter.

Experts have said that the shares of the companies fell because the model is expected to result in huge losses to the firms. However, the government has assured that it will compensate oil firms for any losses suffered by them due to the switch to the new pricing model in the country. Finance ministry is already backing plan to move to export parity for pricing of petrol and diesel in the country.

Major Oil firms like Hindustan Petroleum Corp , Bharat Petroleum Corp and Indian Oil Corp were trading between 4 to 6 per cent down today following the reports about the new pricing model.