Shares of three public sector oil marketing companies rose by 1.57% to 4.61% at 11:47 IST on BSE as diesel prices were on Saturday, 31 May 2014, hiked by 50 paise a litre, excluding state levies.
BPCL (up 4.61%), HPCL (up 4.18%) and Indian Oil Corporation (IOC) (up 1.57%), edged higher.
The S&P BSE Sensex was up 265.78 points, or 1.10% at 24,483.12.
Public sector oil marketing companies (PSU OMCs) increased the retail selling price of diesel (retail) by Rs 0.50 a litre (excluding state levies) with effect from midnight of 31 May 2014.
The above increase is pursuant to GOI order dated 17 January 2013, whereby OMCs have been authorized to increase the retail selling price of diesel within a small range every month until further orders. Accordingly, since then, retail diesel prices are being revised every month.
IOC said in a statement that even after the current increase, under recovery on retail diesel shall stand at Rs 2.80 a litre. The company is also suffering under-recoveries on sale of superior kerosene oil (SKO) (PDS) of Rs 32.87 a litre & LPG (domestic) of Rs. 432.50 per cylinder, IOC said in a statement.
For the year 2014-15, IOC is expected to incur under-recovery of around Rs 53600 crore on sale of three sensitive products (industry around Rs 101700 crore), IOC said.
PSU OMCs suffer under-recovery on domestic sales of diesel, kerosene and LPG at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.
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