Three PSU OMCs rose by 0.82% to 1.68% at 10:05 IST on BSE as crude oil prices dropped.
Meanwhile, the BSE Sensex was up 63.55 points, or 0.24%, to 26,414.72.
BPCL (up 0.96%), HPCL (up 1.68%) and Indian Oil Corporation (IOC) (up 0.82%) gained.
Brent crude oil prices extended recent losses on concern global supply is outpacing demand. Brent for November settlement was off 43 cents at $83.35 a barrel. The contract declined $1.26, or 1.5% to close at $83.78 a barrel on Wednesday, 15 October 2014, the lowest close since 23 November 2010..
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.
However, weakness in rupee against the dollar will offset the benefit to that extent. A weak rupee raises cost of imports.
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In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.59, compared with its close of 61.42 during the previous trading session. Financial markets remained closed on Wednesday, 15 October 2014 account of assembly elections in Maharashtra.
Meanwhile, petrol price was cut by Re 1 a litre with effect from 15 October 2014 excluding local sales tax or VAT. Petrol price in Delhi will come down by Rs 1.21 a litre (including VAT) to Rs 66.65 a litre with effect from 15 October 2014.
Since last price change, international petrol prices have continued to show a downward trend. However, the rupee-dollar exchange rate has depreciated. Despite rupee depreciation against the dollar, the fall in international oil prices warrant a decrease in selling price of petrol in the domestic market, Indian Oil Corporation said in a statement.
Reportedly, the government will review prices of politically sensitive diesel prices once results of assembly elections in Maharashtra and Haryana are out on Sunday, 19 October 2014.
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