Shares of three PSU OMCs rose by 2.63% to 3.3% at 12:05 IST on BSE as crude oil prices edged lower today, 30 June 2014.
HPCL (up 3.3% to Rs 410.25), BPCL (up 3.2% to Rs 588.40) and Indian Oil Corporation (IOCL) (up 2.63% to Rs 341.55) gained.
Meanwhile, the S&P BSE Sensex was up 286.40 points, or 1.14% at 25,386.32
Oil prices edged lower today, 30 June 2014 adding to last week's fall as supply disruption fears from Iraq eased as government forces launched a pushback against a Sunni militant takeover of large areas of the country. Brent crude oil futures for August delivery were down 28 cents or 0.25% at $113.02 a barrel, today, 30 June 2014.
Lower crude oil prices will decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has already freed pricing of petrol.
A monthly revision in diesel prices is due today, 30 June 2014. PSU OMCs have been raising diesel prices by 50 paise per litre at the end of every month after the Congress led United Progressive Alliance (UPA) government in January 2013 allowed PSU OMCs to increase the retail selling price within a small range every month.
The under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective 16 June 2014 fell to Rs 1.62 per litre. This was Rs 2.80 per litre during first fortnight of June 2014 with effect from 1 June 2014. In the case of PDS kerosene and domestic LPG, the under-recoveries for the second fortnight of June 2014 continued to be Rs 32.87 per litre and Rs 432.71 per cylinder respectively, as in the last fortnight.
PSU OMCs, effective 16 June 2014, are now incurring combined daily under-recovery of about Rs 249 crore on the sale of diesel, PDS kerosene and domestic LPG. This is less than Rs 262 crore daily under-recoveries during previous fortnight. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 in the 2013-14.
Prime Minister Narendra Modi said on 14 June 2014, that repairing the economy would require unpleasant decisions and tough actions, which triggered speculation that the government may raise fuel prices and or announce diesel price deregulation to reduce the government's fuel subsidy burden.
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