PSU OMCs firm up on lower crude oil prices

Shares of three public sector oil marketing companies rose by 1.12% to 1.64% at 10:01 IST on BSE after Brent crude prices dipped below $90 a barrel.

HPCL (up 1.64%), Indian Oil Corporation (up 1.36%) and BPCL (up 1.12%), edged higher.

The S&P BSE Sensex was down 281.92 points, or 1.06% at 26,355.36.

Brent for November settlement was off $1.92, or 2.13% at $88.13 a barrel in Asian trading today, 10 October 2014.

Brent crude November futures settled down $1.33, or 1.5%, at $90.05 a barrel on Thursday, 9 October 21014.

Lower crude oil prices will decrease under recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at government controlled prices.

Government, on 1 October 2014, said PSU OMCs were making gains of Rs 1.90 per litre on diesel for the period of 1-15 October 2014. During the same period, under-recovery on kerosene and LPG stood at Rs 156 crore, it added. This is lower than Rs 190 crore daily under-recoveries during previous fortnight, it said.

Diesel prices have not been deregulated or freed yet and so rates cannot be reduced. Petrol on the other hand, had been deregulated in June 2010 and rates have since then moved every fortnight in tandem with the cost.

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