PSU OMCs edge lower

Three PSU OMCs fell by 0.95% to 1.43% at 11:39 IST on BSE fell as weakness in rupee against the dollar offset the benefit of falling global crude oil prices.

Meanwhile, the S&P BSE Sensex was down 117.51 points or 0.44% at 26,656.37

Among PSU OMCs, HPCL (down 0.95%), Indian Oil Corporation (down 1.06%) and BPCL (down 1.43%) declined.

Brent crude dropped below $60 a barrel, hovering near its lowest in five years as a supply glut dragged down prices. Brent for February settlement was off 64 cents a barrel at $59.37 a barrel. The contract had lost $1.2 a barrel to settle at $60.01 a barrel during the previous session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 63.61, compared with its close of 63.54 during the previous trading session.

A weak rupee raises the cost of imports. PSU OMCs incur under-recoveries on domestic sale of LPG and kerosene at government controlled prices. The government has already freed pricing of petrol and diesel.

PSU OMCs early this week cut petrol and diesel prices due to falling global oil prices. Indian Oil Corporation (IOCL) on 15 December 2014, announced reduction in retail selling price of petrol by Rs 2 per litre at Delhi (including state levies) with corresponding decrease in other states and decrease retail selling price of diesel (retail) by Rs 2 per litre at Delhi (including state levies) with corresponding decrease in other states.

PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.

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