Shares of three public sector oil marketing companies rose by 0.22% to 1.15% at 11:00 IST on BSE after global crude oil prices extended recent losses.
Meanwhile, the BSE Sensex was up 62.77 points, or 0.23% to 27,664.78.
Among PSU OMCs, BPCL (up 1.15%), Indian Oil Corporation (up 0.45%) and HPCL (up 0.22%) edged higher.
Brent crude futures dropped on persistent concerns over a supply glut and a bearish demand outlook. Brent for January settlement was down 18 cents a barrel at $63.50 a barrel. The contract had lost 56 cents a barrel to settle at $63.68 during the previous trading session.
Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports of crude oil for PSU OMCs.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.4225, compared with its close of 62.345 during the previous trading session.
Meanwhile the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi on Wednesday, 10 December 2014, has approved a mechanism for procurement of ethanol by Public Sector oil marketing companies (OMCs) to carry out the ethanol blended petrol (EBP) program. The CCEA approved replacing the current procedure on ethanol viz. delivered price of ethanol may be fixed in the range of Rs 48.50 per litre to Rs 49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the OMCs. The rates proposed would be delivered price at depot location and inclusive of all central and state taxes, transportation costs, etc which would be borne by the ethanol suppliers. The OMCs will incorporate "Supply or Pay" clause duly backed up with bank guarantee in their supply agreement with ethanol suppliers. OMCs will sign MOU with the state governments for a comprehensive system for uninterrupted inter-depot transfer of ethanol within a State. This may include annual excise permits to OMCs for movement of ethanol and other relevant measures.
PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.
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