MUMBAI: The sharp hike in oil prices following the drone attacks on Saudi Aramco facilities has sent Sensex spiralling downwards by 642.22 points to 36,481.09 at close on Tuesday.
The Nifty50 too fell by 185.90 points to close at 10,817.60.
Saturday’s drone attack on Saudi Arabia’s largest crude oil processing facility may see petrol and diesel prices shoot up by up to Rs 4 per litre over the next fortnight, The New Indian Express had reported.
At a time when they were already reeling, automobile companies on the NSE lost the most, down by 3.83%. Hero Motocorp was down 6.25%, Tata Motors by 4.98%, Maruti by 4.62% and Bajaj Auto by 3.08%.
The weekend drone attacks in Saudi had wiped out about 5% of global oil supply, and sent Brent crude prices surging by a whopping 20 per cent on Monday.
"These attacks resulted in production suspension of 5.7 million barrels of crude oil per day," Saudi Aramco said in a statement.
On Tuesday, Petroleum Minister Dharmendra Pradhan stepped in to allay fears saying that after a review with Oil Marketing Companies "we are confident there will be no supply disruption to India".
Every $1 increase in crude oil prices adds $2 billion to India's import bill. The bill had already risen by $ 32.1 billion to $111.9 billion year-on-year in the last financial year.
Despite Pradhan's assurances, the experts are staying firm with their prediction that oil prices will spike in the next several days. In India, as reported, they expect petrol and diesel prices to climb by up to Rs 4 per litre over the next fortnight.
The drone attacks on Saturday had targeted Abqaiq, the site of the largest oil processing plant run by the Saudi state oil company, Aramco, and the Khurais oilfield.