BPCL (down 2.24%), HPCL (down 0.98%) and Indian Oil Corporation (IOC) (down 0.73%) edged lower. BPCL had fallen 2.35%, HPCL had declined 4.02% and Indian Oil Corporation (IOC) had slipped 2.51% in two trading sessions to Thursday, 2 August 2012.

Meanwhile, the BSE Sensex was down 120.43 points or 0.7% to 17,103.93

BPCL underperformed the market over the past one month till 2 August 2012, falling 4.99% compared with the Sensex's 1% fall. The scrip, however, outperformed the market in past one quarter, gaining 7.74% as against Sensex's 0.45% fall.

HPCL outperformed the market over the past one month till 2 August 2012, falling 0.66% compared with the Sensex's 1% fall. The scrip had also outperformed the market in past one quarter, rising 11.13% as against Sensex's 0.45% fall.

IOC outperformed the market over the past one month till 2 August 2012, rising 2.99% compared with the Sensex's 1% fall. The scrip had also outperformed the market in past one quarter, rising 1.52% as against Sensex's 0.45% fall.

Shares of three public sector oil marketing companies extended two-day decline on rising under-recoveries on diesel and PDS kerosene.

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas have reviewed international prices of crude oil and petroleum products during the second fortnight of July 2012. Accordingly, the under-recovery on HSD (High Speed Diesel) applicable for 1st fortnight of August effective Wednesday, 1 August 2012 increased substantially to Rs 12.13 per litre. This is higher than Rs 9.95 per litre prevailing during previous fortnight. In case of PDS kerosene also the under-recovery rose to Rs 28.54 per litre for the month of August 2012 from Rs 27.20 per litre for July 2012. However, under-recovery on domestic LPG fell to Rs 231 per cylinder in for August 2012 from Rs 319 cylinder in July 2012.

PSU OMCs are currently effective Wednesday, 1 August 2012 incurring daily under-recovery of about Rs 402 crore on the sale of diesel, PDS kerosene and domestic LPG, the press release said.

PSU OMCs suffered under-recovery of Rs 138541 crore in the year ended 31 March 2012, which was sharply higher than under-recovery of Rs 78190 crore in the year ended 31 March 2011. Their under-recovery was Rs 47811 crore during April to June 2012 period.

The government decontrolled pricing of petrol in 2010. However, public sector oil marketing companies (PSU OMCs) suffer revenue loss on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price.

Meanwhile, PSU OMCs on Wednesday, 1 August 2012 raised jet fuel or ATF rates by a steep 4.5% on firming international crude oil prices. The hike comes on back of a 1.7% hike in rates effected from 16 July 2012.

ATF typically makes up almost half of an airline's operating cost and the increase in prices will increase the burden of cash-strapped airlines. PSU OMCs revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.