Shares of three PSU OMCs rose by 1.63% to 2.19% at 9:30 IST on BSE as crude oil prices slumped on Friday, 2 September 2014.
HPCL (up 2.19%), Indian Oil Corporation (up 2%) and BPCL (up 1.63%), edged higher.
The S&P BSE Sensex was up 118.42 points, or 0.44% at 27,145.12.
Crude oil futures dropped on Friday, 5 September 2014, after downbeat US jobs data fuelled demand concerns and a ceasefire in Ukraine cooled geopolitical tensions. Brent October contract finished $1.01, or 1%, lower at $100.82 a barrel on Friday. US crude October contract finished $1.16, or 1.2%, lower at $93.29 a barrel on Friday.
In Asian trading today, 8 September 2014, Brent October contract was down 10 cents or $100.72 a barrel while US crude October contract was down 2 cents at $93.27 a barrel.
Lower crude oil prices will decrease under recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
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The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the second fortnight of August 2014. The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of September 2014, effective from 1 September 2014, will go down to Rs 0.08 per litre, from Rs 1.78 per litre during second fortnight of August 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the first fortnight of September 2014 was Rs 32.67 per litre (Rs 32.98 per litre in second fortnight of August 2014) and Rs 427.82 per cylinder (Rs 447.87 per cylinder in second fortnight of August 2014) respectively. Effective from 1 September 2014, PSU OMCs are incurring combined daily under-recovery of about Rs 195 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 230 crore daily under-recoveries during second fortnight of August 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14.
Meanwhile, petrol prices were reduced by Rs 1.82 per litre (including state levies) at Delhi, with corresponding decrease in other states from 31 August 2014. The price of domestic non-subsidised LPG cylinder was reduced by Rs 19 for a 14.2 kg cylinder and that of LPG commercial cylinder was reduced by Rs 32.50 for a 19 kg cylinder (including VAT) at Delhi with corresponding decrease in other states from 1 September 2014, as international prices declined in August.
Price of diesel sold to bulk consumers (Bulk HSD) was reduced by Rs 1.32 per litre at Delhi (including VAT) with corresponding decrease in other states from 1 September 2014 as prices in international market showed downtrend, IOC said. For retail diesel, an increase of Rs. 0.50 per litre (excluding VAT) is being effected in retail diesel prices, with effect from 31 August 2014, resulting in increase of Rs. 0.57 per litre in retail selling price at Delhi (including VAT) with corresponding increase in other states, IOC said.
PSU OMCs review fuel prices on 1st and 16th of every month based on the average imported oil price in the previous fortnight.
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