Shares of three public sector oil marketing companies fell by 1.16% to 4.38% at 12:27 IST on BSE after oil minister ruled out any steep increase in diesel and cooking-fuel prices.
HPCL (down 2.91% to Rs 188.25), BPCL (down 4.38% to Rs 302) and Indian Oil Corporation (down 1.16% to Rs 216.80) edged lower.
Meanwhile, the S&P BSE Sensex was down 162.64 points or 0.82% at 19,757.57
Shares of three public sector oil marketing companies (PSU OMCs) declined after the Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily on Tuesday, 24 September 2013, ruled out any steep increase in diesel and cooking-fuel prices.
PSU OMCs, which control more than 90% of the fuel-retail market in India, sell diesel and cooking fuels at government-set discounted prices. The government partially reimburses them for the discounted sales.
Dr. Moily on Tuesday, 24 September 2013, asked the people of India to conserve petroleum products to help the government's finances and reduce the country's oil-import bill. He said that the bulk of India's fuel consumption is in the transport sector. Consumers in the transport sector, agriculture sector as well as domestic consumers can adopt simple but effective conservation tips so as to reduce consumption of these products, he said. The oil ministry will be launching a nationwide campaign to generate awareness amongst the consumers for conserving petroleum products, with special focus on the transport sector. The total funds allocated for this campaign is over Rs 45 crore, to be shared by six oil PSUs and the PCRA (Petroleum Conservation Research Association) budget. The objective will be to motivate the consumers in cities and towns to minimize their fuel bills, thereby helping the nation in reducing oil imports. India meets three-fourths of the crude oil it requires through imports, and it spent more than $144 billion on oil imports in the last fiscal year ended in March.
Dr. Moily said that PCRA has formulated benchmarking norms for LPG stoves, and diesel pumps, in consultation with Bureau of Energy Efficiency (BEE) and other stakeholders. This programme will facilitate availability of more fuel efficient appliances to the consumers, thereby reducing consumption of LPG and Diesel, he said.
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PSU OMCs are marketing performance enhanced petrol and diesel. Some special additives are mixed in these fuels which enhance fuel efficiency, reduce maintenance cost and reduce pollution. However, these fuels are more costly due to higher statutory duties. The oil ministry will take up the issue with the finance ministry so that the duty structure is rationalized which will promote their mass consumption, Dr. Moily said.
He also said that the oil ministry has requested the Urban Development Minister to introduce "Free Cycle Scheme" in select cities for saving fuel and offered funding support from oil sector companies.
At present the state transport undertakings (STUs) are purchasing diesel at market driven prices without any subsidy. The oil ministry has received representation from various states on this issue. PSU OMCs have also reported that the dual pricing mechanism is not working since STU bus fleets are taking fuel from retail outlets causing hindrance in the smooth functioning of ROs and in the process wasting fuel. The oil ministry will consider allowing STUs to purchase diesel at the subsidized price in view of the need to encourage public transport but this would be subject to their active cooperation in the fuel conservation campaign, Dr. Moily said.
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