PSU OMCs decline after non-subsidised LPG price cut

Shares of three public sector oil marketing companies fell by 0.53% to 2.64% at 11:46 IST on BSE after prices of non-subsidised cooking gas were reduced effective from Saturday, 1 February 2014.

HPCL (down 2.64%), BPCL (down 2.3%) and Indian Oil Corporation (down 0.53%), edged lower.

The S&P BSE Sensex was down 102.95 points, or 0.50% at 20,410.90.

A 14.2 kilogram (kg) gas cylinder will now cost Rs 1,134 per cylinder, down by Rs 107 per cylinder from earlier Rs 1,241 per cylinder in Delhi. There is no change in the price of subsidised cooking gas, which costs Rs 414 per cylinder in Delhi. The government had on 30 January 2014 raised the cap on supply of subsidised cooking gas cylinders from nine to 12 per household in a year. Public sector oil marketing companies (PSU OMCs) suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices.

Meanwhile, PSU OMCs hiked the price of diesel on Friday, 31 January 2014, by 50 paise per litre, while that of petrol was kept unchanged. The hike, which will take effect from Saturday, is excluding local sales tax, or VAT. The actual increase will be higher and will vary from city to city.

In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.

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