PSU OMCs decline after gains in crude oil prices

Shares of three public sector oil marketing companies shed by 0.27% to 1.75% at 13:10 IST on BSE after global crude oil prices jumped yesterday, 25 February 2015.

Meanwhile, the S&P BSE Sensex was down 162.28 points or 0.56% at 28,845.71.

Among PSU OMCs, BPCL (down 0.27%), Indian Oil Corporation (down 0.35%) and HPCL (down 1.75%) edged lower.

Brent crude oil futures edged lower after yesterday's rally triggered by weakness in dollar and comments from Saudi Arabia's oil minister Ali Al-Naimi that oil demand is growing. Brent for April settlement was off 20 cents at $61.43 a barrel. The contract had jumped $2.97 a barrel or 5.06% to settle at $61.63 a barrel during the previous trading session.

Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

However, firmer rupee will reduce adverse effect of higher oil prices to that extent. A firm rupee reduces the cost of imports.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.9475, compared with its close of 61.985 during the previous trading session.

State run oil marketing companies will review fuel prices on the last day and during the middle of the month based on the average imported oil price in the preceding fortnight.

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