Shares of public sector oil marketing companies rose by 1.15% to 1.36% at 9:23 IST on BSE after a hike in petrol and diesel prices, effective from midnight of 31 August 2013.
BPCL (up 1.36%), HPCL (up 1.31%) and Indian Oil Corporation (up 1.15%), edged higher.
The S&P BSE Sensex was up 138.30 points, or 0.74% at 18,758.02.
Public sector oil marketing companies (PSU OMCs) hiked petrol price by Rs 2.35 per litre on falling rupee and firming international oil prices. The fuel price hike, which was effective from midnight of 31 August 2013, excludes local sales tax or VAT. Petrol price in Delhi has increased by Rs 2.83 to Rs 74.10 per litre. This is the sixth increase in rates since June.
In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses. Diesel price in Delhi has been hiked by 57 paise to Rs 51.97 per litre.
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.
A falling rupee adversely impacts PSU OMCs as these companies import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
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