PSU OMCs rise after diesel price hike

Shares of public sector oil marketing companies rose by 0.53% to 1.29% at 10:06 IST on BSE after prices of diesel were hiked by Rs 0.50 a litre with effect from midnight of 31 July 2014.

HPCL (up 1.29%), BPCL (up 1.02%) and Indian Oil Corporation (IOC) (up 0.53%), edged higher.

The S&P BSE Sensex was down 127.21 points, or 0.49% at 25,767.76.

Public sector oil marketing companies (PSU OMCs) on Thursday, 31 July 2014, decided to increase retail diesel price by Rs 0.50 a litre and cut retail petrol prices by Rs 1.09 a litre at Delhi with effect from midnight of 31 July 2014.

PSU OMCs, however, reduced the diesel price for bulk consumers by Rs 0.72 a litre at Delhi. Price of non-subsidized LPG cylinder was reduced by Rs 2.50 for a 14.2 kg cylinder and that of commercial LPG cylinder was reduced by Rs 4 for a 19kg cylinder at Delhi. The rates will vary from State to State depending on local taxes and levies.

PSU OMCs, effective 16 July 2014, are now incurring combined daily under-recovery of about Rs 261 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 271 crore daily under-recoveries during previous fortnight. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in 2013-14.

PSU OMCs suffer under-recovery on domestic sales of diesel, kerosene and LPG at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.

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