Three PSU OMCs fell by 3.07% to 4.15% at 14:53 IST on BSE on worries gains in Brent oil and weakness in rupee could affect margins as India imports 80% of its oil requirement.
Meanwhile, the S&P BSE Sensex was down 5.02 points or 0.02% at 27,345.66
Among PSU OMCs, HPCL (down 3.07%), Indian Oil Corporation (down 3.52%) and BPCL (down 4.15%) declined.
Meanwhile, the next fuel price review from PSU OMCs is due tomorrow, 16 December 2014.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week. Brent for January settlement was up $1 a barrel at $62.85 a barrel. The contract had lost $1.83 a barrel or 2.9% to settle at $61.85 during the previous trading session on Friday, 12 December 2014, the lowest closing level since July 2009. Brent for February settlement was up 7 cents a barrel to 62.93 a barrel.
Higher crude oil prices could increase 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.
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In the foreign exchange market, the rupee edged lower against the dollar on year-end dollar demand from importers. The partially convertible rupee was hovering at 62.84, compared with its close of 62.29 during the previous trading session.
Recent decline in crude oil prices has benefited PSU OMCs but fall in rupee against the dollar could erase benefit derived from falling crude to that extent.
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