HPCL, BPCL, IOCL and ONGC Shares in Focus: Govt Hiked Excise Duty by ₹2 Per Litre

On April 8, 2025, HPCL, IOCL, ONGC, BPCL shares and others are in focus after a steep fall in global crude oil prices and a fresh hike in export duties rattled investor sentiment.

At 09:55 AM, the Nifty Oil & Gas index opened in the green, up 0.49% to 9,899.35. Backed by the growth of 1.41% in Brent crude to $65.10 per barrel amid mounting trade tensions between the United States and China.

Government Raised SAED

The government raised the Special Additional Excise Duty (SAED) on petrol and diesel by ₹2 per litre each. With this revision, the SAED on petrol now stands at ₹13 and diesel at ₹10. The hike, effective April 8, will not affect domestic pump prices

Initially, stocks of exploration and production companies, including ONGC and Oil India, slumped by up to 6%. Major OMCs like Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum also saw heavy selling. However, as Brent crude dipped further towards $60 per barrel, the shares recovered sharply from the day’s lows on hopes of lower input costs.

Rising Cost to be Bear by OMCs

As per post on X by IOCL:

The Excise Duty increase of ₹2 per litre on #petrol and #diesel by the Central Government will not be passed on to the consumers.

On one hand, this will insulate the customers from the price hike while on the other hand, the collected amount may be utilised towards under-recovery of LPG, providing relief to Oil Marketing Companies.

Relief to the General Public

The Ministry of Petroleum and Natural Gas clarified that the hike would not be passed on to consumers, and domestic retail prices would remain unchanged. Still, OMCs are expected to bear the impact in the short term.

In a follow-up press conference, Petroleum Minister Hardeep Singh Puri reiterated that consumer prices will remain unaffected. “Let me clarify upfront and on the record — this will not be passed on to the consumer,” he said. He noted that while global crude has dipped to around $60, OMCs are holding inventory priced at an average of $75, typically over a 45-day cycle.

“If crude stabilises in the vicinity of $60–$65, OMCs will have the headroom to look at price,” Puri added. He also confirmed that the ₹2 SAED hike is partly aimed at compensating the OMCs for mounting under-recoveries on LPG.

The hike is expected to generate ₹33,000 crore in revenue, while a simultaneous ₹50 per cylinder increase in domestic LPG prices is likely to fetch another ₹5,000–₹7,000 crore. Public sector OMCs are carrying under-recoveries of over ₹41,000 crore for FY25 due to rising global prices and pending subsidy dues.

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