Shares of Indian oil market companies (OMCs) moved up in the wake of Oil Minister Veerapa Moily's announcement of diesel price revisions by small quantum over a period of time.

At 01: 50 pm, Hindustan Petroleum Corp shares (HPCL.NS) jumped 5.32 percent, Bharat Petroleum Corporation Limited gained 3.22 percent, and Indian Oil Corp traded 3.89 percent higher.

At 13.27 pm, the Sensex rose 113.91 points or 0.57 percent at 19931.54, while Nifty the gained 29.45 points or 0.49 percent at 6031.30.

The decision to allow OMCs partially de-regulate diesel prices came a week after the Oil Ministry sent a proposal to the Cabinet regarding the same.

"Oil companies have been given freedom to make small price corrections," said Finance Minister P. Chidambaram, while not giving details on the price quantum and date of the revisions.

Besides the change in fuel prices, the subsidised LPG cap was raised from six cylinders per year to nine.  The change is expected to take effect from April, said reports.

Contrary to expectations, the government's decision to authorize OMCs make corrections in diesel prices will not affect the ballooning subsidy bill for the current fiscal year ending in March, reported Reuters.

Analysts opined that the OMCs will gain considerably from the move in terms of profitability. Diesel, makes up for about 40 percent of refined fuel consumption in the country and with a loss of ₹9 on the sale of every litre, oil firms are losing around ₹94,000 on an annual basis, reported Economic Times.