Shares of three state-run upstream oil and gas firms rose by 0.85% to 3.54% at 14:59 IST on BSE on anticipation that falling crude oil prices may reduce subsidy burden on these companies.
ONGC (up 3.54%), Oil India (up 1.29%) and GAIL (India) (up 0.85%), edged higher.
The BSE Sensex was up 357.76 points, or 1.77% at 20,575.15.
Brent crude slumped after Iran and world powers reached an initial agreement on the Islamic republic's nuclear program that will loosen economic sanctions while maintaining a cap on oil sales.
Brent North Sea crude, the European benchmark, for January delivery fell $2.34, or 2.11%, in mid-afternoon Asian trade to $108.71, while New York's main contract, West Texas Intermediate (WTI) for January, was down $1.30, or about 1.37%, at $93.54.
Public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and Indian Oil Corporation -- suffer revenue loss on domestic sale of diesel, LPG and kerosene at a controlled price (The government decontrolled pricing of petrol in 2010). The government compensates PSU OMCs for their under-recoveries through oil bonds. The rest of the cost-price gap is borne by three state-run oil and gas firms -- GAIL (India), ONGC and Oil India.
GAIL (India) provided provisional discount of Rs 698.68 crore in Q2 September 2013, lower than the discount of Rs 785.67 crore in Q2 September 2012.
ONGC's gross subsidy discount rose 11.9% to Rs 13796 crore in Q2 September 2013 over Q2 September 2012. The subsidy discount impacted the profit before tax (PBT) by Rs 11545 crore and profit after tax (PAT) by Rs 7621 crore.
Oil India's subsidy to PSU OMCs decreased by 7% to Rs 2233.7 crore in Q2 September 2013 over Q2 September 201. The subsidy affected the profit after tax (PAT) for Q2 September 2013 by Rs 1265.68 crore.
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