* India's state-owned oil refiners and explorers rose on speculation the government would allow diesel prices to rise, traders said. * Hopes for a diesel price hike had dwindled after the government came under intense pressure last month after allowing a rise in petrol prices, but the optimists has been given a new push after Fitch Ratings on Monday become the second credit agency to cut the country's outlook. * Both refiners and explorers in India tend to track movements in oil prices because the government caps prices of petrol products such as diesel, cooking gas and kerosene. * That means state-owned producers such as ONGC share with the government the cost of subsidising refiners by selling crude to them at a discount. Refiners then sell fuels, except for petrol, at government-mandated prices. * Also adding to the gains were Brent crude prices that fell to a near 17-month low below $95 a barrel on Tuesday, hit by the latest twist in the euro zone crisis. * Oil refiners Bharat Petroleum Corporation rose 1.72 percent, Hindustan Petroleum Corporation gained 5.96 percent, while Indian Oil Corporation added 3.65 percent at close. * Explorers ONGC and Oil India gained 1.7 and 1.15 percent respectively.

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