Shares of three PSU OMCs rose by 0.86% to 1.60% at 9:47 IST on BSE after crude oil prices eased and rupee strengthened against the dollar.
BPCL (up 1.60%), HPCL (up 1.46%) and Indian Oil Corporation (up 0.86%), edged higher.
The BSE Sensex was up 142.86 points, or 0.70% at 20,558.37.
US crude oil futures hovered near their lowest level in more than three months on Friday, 18 October 2013. Light sweet crude oil for November delivery was up 11 cents at $100.78 a barrel on the New York Mercantile Exchange. The contract touched a session low of $100.03 on Thursday, its weakest since 3 July 2013.
Public sector oil marketing companies (PSU OMCs) suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Meanwhile, a strength in rupee also boosted PSU OMCs. In the foreign exchange market, the rupee firmed against the dollar. The partially convertible rupee was hovering at 61.1175, stronger than its close of 61.23 on Thursday, 17 October 2013.
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A strong rebound in rupee against the dollar recently has eased concerns of higher cost of crude oil imports. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged. The rupee had hit its record closing low of 68.80 on 28 August 2013.
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