All three listed OMCs, Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) were up 3% to 5%. Meanwhile Jet Airways (India), SpiceJet, and InterGlobe Aviation, which runs IndiGo were trading higher in the range of 2% to 5% on the BSE. On comparison, the S&P BSE Sensex was up 0.87% or 316 points at 36,582 at 11:13 am.
“Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating U.S.-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply,” the Reuters report suggested. CLICK HERE TO READ FULL REPORT
Lower crude oil prices could reduce under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Fuel costs are the biggest expense for airlines. The size of the oil drop means that more of that revenue will end up as profits.