Shares of three public sector oil marketing companies rose by 2.85% to 7.71% at 15:00 IST on BSE as a rally in rupee against the dollar eased concerns of higher cost of crude oil imports.
BPCL (up 7.71%), HPCL (up 4.25%) and Indian Oil Corporation (IOCL) (up 2.85%), edged higher.
The S&P BSE Sensex was up 738.05 points, 3.70% at 20,700.21.
In the foreign exchange market, the rupee surged past 62 against the dollar as the Fed refrained from withdrawing monetary stimulus to the US economy. The partially convertible rupee was hovering at 61.74, sharply higher than its close of 63.38/39 on Wednesday, 18 September 2013.
The strength in rupee has eased concerns about increased costs of importing oil. Public sector oil marketing companies (PSU OMCs) import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
PSU OMCs had hiked petrol prices by Rs 1.63 a litre with effect from 14 September 2013.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas on 16 September 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for second fortnight of September 2013 has increased to Rs 14.50 per litre from Rs 12.12 per litre during the first fortnight of September 2013. PSU OMCs are currently incurring combined daily under-recovery of about Rs 486 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices. PSU OMC's incurred Rs 25579 crore as under-recoveries in Q1 June 2013 on Diesel, PDS Kerosene and Domestic LPG.
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