PSU OMCs jump as crude oil prices drop, rupee recovers

Three PSU OMCs rose by 2.36% to 5.21% at 11:08 IST on BSE after Brent oil prices declined and rupee strengthened against the dollar.

HPCL (up 5.21%), BPCL (up 3.19%) and Indian Oil Corporation (up 2.36%), edged higher.

The S&P BSE Sensex was up 367.69 points, or 1.38% at 26,966.80.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.9675, compared with its close of 64.24 during the previous trading session. A strength in rupee against the dollar eased concerns of higher cost of crude oil imports.

Brent crude oil futures edged lower. Brent for June settlement was down 15 cents at $65.39 a barrel. The contract had fallen $2.23 a barrel or 3.29% to settle at $65.54 a barrel during the previous trading session.

Lower crude oil prices will reduce underrecovery of PSU OMCs (public sector oil marketing companies) on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

PSU OMCs after a fortnightly revision in fuel prices on 30 April 2015 announced a steep hike in petrol and diesel prices. Indian Oil Corporation (IOCL) hiked petrol prices by Rs 3.96 per liter to Rs 63.16 per liter in Delhi effective 1 May 2015 (including state levies), with corresponding price revision in other states. Diesel prices were hiked by Rs 2.37 per liter to Rs 49.57 per liter at Delhi (including state levies) with corresponding price revision in other states.

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