Hindustan Petroleum Corporation (HPCL) share price declined 13 per cent to Rs 186.70 apiece on the BSE.
Oil marketing companies (OMCs) share prices were trading under pressure in Wednesday’s weak market as the Centre hiked excise duty on petrol by Rs 10 a litre and on diesel by Rs 13 per litre. State-controlled oil marketing companies Indian Oil Corp, BPCL, and HPCL will absorb the price hike. Hindustan Petroleum Corporation (HPCL) share price declined 13 per cent to Rs 186.70 apiece on the BSE. Bharat Petroleum Corporation (BPCL) share price fell 10 per cent to Rs 312.15. Shares of Indian Oil Corporation (IOC) were down 7.5 per cent at Rs 72.85 apiece on BSE. “The hike in excise duty would be absorbed by OMCs which will take another big hit on marketing margins with demand slowdown,” Ashika Institutional Equity said.
BSE Oil & Gas index was trading 0.47 per cent or 55 points down at 11,568. In the opening deals, the index fell over 2.5 per cent to hit the day’s low of 11,305.78. The top losers on the index include HPCL, IOC and BPCL. “The recent marketing margins were never sustainable for a long time and we thus expect marketing margins to drop substantially from recent levels, recovering a bit over mid-term, provided oil prices remain at current levels,” Ashika Institutional Equity added.
People in Delhi will have shell out Rs 71.26 for a litre of petrol and Rs 69.39 per litre for diesel, according to the data available with Indian Oil Corp website. In less than two months, it is the second hike in excise duty on petrol and diesel prices. In March, the government had raised the excise duty on petrol and diesel by Rs 3 per litre, to earn an additional estimated Rs 39,000 crore. However, since March 16, fuel retailing companies, IOC, BPCL and HPCL kept the fuel prices unchanged. According to a notification issued by the Central Board of Indirect Taxes and Customs (CBIC), special additional excise duty on petrol has been increased by Rs 2 per litre and road cess by Rs 8 a litre. On the other hand, on diesel, special additional excise duty has been raised by Rs 5 per litre and road cess by Rs 8 a litre. Earlier this week, the Delhi government hiked VAT on petrol by Rs 1.67 litre, and on diesel by Rs 7.1 per litre.