In a bid to provide relief to the common man, the Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol and diesel by Rs 8 and Rs 6 per litre over the weekend. The FM also announced a Rs 200 subsidy on LPG users under the Ujjwala Yojana Scheme.
Following this development, shares of OMC (Oil Marketing companies ) like Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation are likely to be in focus in the near term. Depsite gains on the benchmark indices, the OMCs were seen trading on a flat note so far on Monday.
"Government recently announced to cut excise duty on petrol and diesel by Rs 8/6/litre given rising inflationary pressures. Accordingly, we cut FY23E earnings of HPCL/BPCL by 56-40 per cent as we lower marketing loss for diesel to Rs 3/litre (from +4/litre earlier), while increasing GRMs. OMCs ability to reduce high marketing losses of Rs 6/10/litre for Q1FY23 on petrol and diesel will be contingent on crude price correction, as high inflationary pressure will prevent meaningful retail price hikes despite excise duty cuts," wrote analysts at Prabhudas Lilladher in a recent note.
TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.
Already a premium subscriber? LOGIN NOW
SUBSCRIBE TO INSIGHTS
What you get on Business Standard Premium?
- Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
- Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
- Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
- Pick your 5 favourite companies, get a daily email with all news updates on them.
- 26 years of website archives.
- Preferential invites to Business Standard events.