PSU OMCs extend Thursday's rally

Three PSU OMCs rose 1.75% to 2.8% at 13:20 IST on BSE, extending Thursday's rally triggered by the recent slide in crude oil prices.

BPCL (up 2.8% at Rs 634.10), Indian Oil Corporation (up 2.51% at Rs 376.10), and HPCL (up 1.75% at Rs 454.20) edged higher.

Meanwhile, the S&P BSE Sensex was up 244.41 points or 0.98% at 25,263.92.

US crude oil futures for July delivey fell 10 cents to $102.38 a barrel in electronic trade today, 6 June 2014. The contract had fallen 16 cents or 0.15% to settle at $102.48 on the New York Mercantile Exchange on Thursday, 5 June 2014.

Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

PSU OMCs hiked diesel prices by 50 paise a litre, excluding state levies, with effect from 1 June 2014.

The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of June effective 2 June 2014 declined to Rs 2.80 per litre. This was Rs 4.41 per litre during the second fortnight of May 2014. In the case of PDS Kerosene, the under-recovery for the first fortnight of June 2014 declined to Rs 32.87 per litre, from Rs 33.84 per litre during the second fortnight of May 2014. In case of domestic LPG, the under-recovery for the first fortnight of June 2014 declined to Rs 432.71 per cylinder, from Rs 449.13 per cylinder during the second fortnight of May 2014. Oil Marketing Companies (OMCs), effective from 2nd June 2014, are incurring combined daily under-recovery of about Rs 262 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 318 crore daily under-recoveries during the second fortnight of May 2014.

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