Shares of three public sector oil marketing companies rose by 0.37% to 0.57% at 10:20 IST on BSE after global crude oil prices slumped yesterday, 10 December 2014.
Meanwhile, the BSE Sensex was down 210.81 points, or 0.76%, to 27,636.17.
Among PSU OMCs, BPCL (up 0.37%), Indian Oil Corporation (up 0.48%) and HPCL (up 0.57%) edged higher.
Brent crude ticked higher but remained below $65 per barrel, and not far above five-year lows hit in the previous session, with the market's bearish tone largely intact. Brent for January settlement was up 51 cents a barrel at $64.75 a barrel. The contract had slumped $2.60 a barrel to settle at $64.24 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.
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.
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