PSU OMCs slip after petrol price cut

Shares of public sector oil marketing companies fell by 0.45% to 0.67% at 9:27 IST on BSE as the price of petrol was on Tuesday, 15 April 2014, cut by Rs 0.70 a litre, excluding local levies.

Indian Oil Corporation (IOC) (down 0.67%), BPCL (down 0.49%) and HPCL (down 0.45%), edged lower.

The S&P BSE Sensex was down 24.75 points, or 0.11% at 22,460.18.

The price of petrol was cut by Rs 0.70 a litre, excluding local levies, the second reduction in rates this month as appreciation of the rupee against the US dollar made oil imports cheaper. The reduction, effective midnight of Tuesday, 15 April 2014 and Wednesday, 16 April 2014, excludes local sales tax or VAT and the actual cut will be higher, varying from city to city. However, there was no change in diesel prices.

Public sector oil marketing companies (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.

As regards regulated products, PSU OMCs are currently suffering under-recovery of Rs 5.49 a litre on high speed diesel (HSD) (retail), Rs 34.43 a litre on superior kerosene oil (SKO) (public distribution system) and Rs 505.50 cylinder on LPG (domestic), IOC said in a statement.

The movement of prices in the international oil market and INR-USD exchange rate are continuously under watch and developing trends reflected in future price changes, IOC added.

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