Sep 02, 2013, 12.23 PM | Source: Moneycontrol.com
Indian Oil Corporation (IOC) rose 0.7 percent while its rivals Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were up 0.9 percent & 1.4 percent, respectively.
Shares of PSU oil marketing companies and oil explorers were firm in morning trade Monday after the government hiked fuel price on Saturday evening.
Petrol price was hiked by a steep Rs 2.35 per litre, the sixth increase in rates in three months, and diesel by 50 paise per litre on falling rupee and firming international oil prices.
The increase in rates is excluding local sales tax or VAT, Indian Oil Corp, the nation's largest fuel retailer, announced Saturday. The actual hike will be higher and will vary from city to city.
Petrol price in Delhi will go up by Rs 2.83 to Rs 74.10 per litre while it will cost Rs 81.57 per litre in Mumbai as against Rs 78.61 currently.
This is the sixth increase in rates since June and in all petrol prices have gone up by a massive Rs 9.17 per litre, excluding VAT.
In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses.
Meanwhile, the rupee fell around 25 percent from April and oil firms are losing Rs 12.12 per litre despite prices being raised by a cumulative Rs 4.75 this year.
IOC said since the last revision in rates effective August 1, the rupee-US dollar exchange rate has deteriorated sharply, from Rs 59.49 to a US dollar to Rs 63.88, necessitating this price increase.
"Currently, the rupee-dollar exchange rate continues to be extremely volatile. Also, geopolitical situation in the Middle-East is leading to pressure on international oil prices as well," it said in a statement.
Deteriorating exchange rate has led to widening of losses on diesel from Rs 10.22 in first fortnight of August to Rs 12.12 per litre loss. The same has also led to widening of under-recoveries on kerosene to Rs 36.83 per litre from Rs 33.54 at the beginning of the company and on LPG to Rs 470 per cylinder from Rs 411.99.
For the full fiscal, IOC estimated total revenue loss or under-recovery of Rs 144,000 crore on sale of diesel, LPG and kerosene for the industry.
(With inputs from PTI)