Shares of three public sector oil marketing companies fell by 2.07% to 3.30% at 9:54 IST on BSE as crude oil prices edged higher.
BPCL (down 3.30%), HPCL (down 2.15%) and Indian Oil Corporation (down 2.07%), edged lower.
The BSE Sensex was down 191.53 points, or 1.03% at 18,406.65.
WTI crude oil for delivery in September was trading higher by 0.06 cents, or 0.06% at $107.52 per barrel in Asian trading today, 19 August 2013.
Public sector oil marketing companies (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.
Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas said on Friday, 16 August 2013, that the under-recovery on High Speed Diesel (HSD) applicable for 2nd fortnight of August effective 16 August 2013 increased sharply to Rs 10.22 per litre higher than Rs 9.29 per litre during 1st July fortnight of July 2013 with effect from 1 August 2013. In the case of PDS Kerosene and Domestic LPG, under-recoveries for the month of August 2013 remains same at Rs 33.54 per litre and Rs 412 per cylinder respectively since it is computed on monthly basis on these products.
PSU OMCs, effective 16th August 2013, are incurring combined daily under-recovery of about Rs 389.00 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is higher than daily under-recovery of Rs 379 crore for the previous fortnight effective 1 August 2013. The OMC's have reported Rs 25,579 crore as under-recoveries during 1st Quarter of 2013-14 on Diesel, PDS Kerosene, Domestic LPG.
Meanwhile, the rupee hit a record low of 62.40 against the dollar in early trade today, 19 August 2013. It was currently trading at 62.25, still sharply lower than Friday's close of 61.65/66.
The weakness in rupee has raised concerns about increased costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
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