PSU OMCs decline after petrol price cut

Shares of three public sector oil marketing companies fell by 0.91% to 2.43% at 10:47 IST on BSE after petrol price was reduced by Rs 3.05 per litre.

Indian Oil Corporation (IOC) (down 2.43%), BPCL (down 1.92%) and HPCL (down 0.91%), edged lower.

The BSE Sensex was up 21.29 points, or 0.11% at 19,401.06.

Public sector oil marketing companies (PSU OMCs) reduced petrol price by Rs 3.05 per litre, the first reduction in rates in over five months. This price change by oil companies are excluding local sales tax or VAT and effective from Tuesday, 1 October 2013.

In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise diesel prices in small doses every month to wipe out mounting losses.

Alongside, PSU OMCs also raised rates of non-subsidised domestic cooking gas (LPG) that households buy after exhausting their quota of 9 subsidised or cheaper cylinder. Price in Delhi was hiked by Rs 71.50 per 14.2-kg cylinder to Rs 1004.

Three PSU OMCs (HPCL, BPCL and IOC) review the fuel prices on 1st and 16th of every month based on the average imported oil price in the previous fortnight.

The government deregulated petrol prices in June 2010. However, PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. 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.

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