PSU OMCs in demand as under-recovery on diesel declines

Three PSU OMCs rose 1.53% to 5.89% at 14:15 IST on BSE after the under-recovery on High Speed Diesel declined to Rs 0.08 per litre in the first fortnight of September 2014, effective 1 September 2014.

HPCL (up 1.98% to Rs 467.15) and Indian Oil Corporation (up 5.89% to Rs 380) gained.

BPCL rose 1.53% to Rs 704.95 after scaling a record high of Rs 705.80 in intraday trade.

Meanwhile, the BSE Sensex was up 203.83 points, or 0.77%, to 26,841.94

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the second fortnight of August 2014. The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of September 2014, effective from 1 September 2014, will go down to Rs 0.08 per litre, from Rs 1.78 per litre during second fortnight of August 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the first fortnight of September 2014 was Rs 32.67 per litre (Rs 32.98 per litre in second fortnight of August 2014) and Rs 427.82 per cylinder (Rs 447.87 per cylinder in second fortnight of August 2014) respectively. Effective from 1 September 2014, PSU OMCs are incurring combined daily under-recovery of about Rs 195 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 230 crore daily under-recoveries during second fortnight of August 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14.

Meanwhile, petrol prices were reduced by Rs 1.82 per litre (including state levies) at Delhi, with corresponding decrease in other states from 31 August 2014. The price of domestic non-subsidised LPG cylinder was reduced by Rs 19 for a 14.2 kg cylinder and that of LPG commercial cylinder was reduced by Rs 32.50 for a 19 kg cylinder (including VAT) at Delhi with corresponding decrease in other states from 1 September 2014, as international prices declined in August.

Price of diesel sold to bulk consumers (Bulk HSD) was reduced by Rs 1.32 per litre at Delhi (including VAT) with corresponding decrease in other states from 1 September 2014 as prices in international market showed downtrend, IOC said. For retail diesel, an increase of Rs. 0.50 per litre (excluding VAT) is being effected in retail diesel prices, with effect from 31 August 2014, resulting in increase of Rs. 0.57 per litre in retail selling price at Delhi (including VAT) with corresponding increase in other states, IOC said.

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