Oil Marketing Companies' Stocks Plummet After Government's Decision on LPG Cylinders

Strategic Insights -

Shares of Hindustan Petroleum Corporation (HPCL) fell 2.5% to Rs 350.20, while Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) declined 1.5% and 0.82%, respectively, after the government announced a price cut of Rs 200 per refill on LPG cylinders. The reduction in prices, effective immediately, will benefit Ujjwala scheme subscribers and costs the exchequer around Rs 7,680 crore for the 2023-24 fiscal. The decision comes ahead of Assembly and Lok Sabha elections scheduled in four states and next year.

Key Takeaways:

  • The government has reduced the price of LPG cylinders by Rs 200 per refill, effective immediately, benefiting Ujjwala scheme subscribers.
  • The price cut will cost the exchequer around Rs 7,680 crore for the 2023-24 fiscal.
  • Hindustan Petroleum Corporation (HPCL) was the top loser among oil marketing companies, with its stock price declining 2.5% to Rs 350.20.
  • Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) declined 1.5% and 0.82%, respectively, following the price cut.
  • The decision comes ahead of Assembly and Lok Sabha elections scheduled in four states and next year, respectively.
  • The Ujjwala scheme subscribers already receive a Rs 200 subsidy on cooking gas cylinders.
  • The additional subsidy on LPG cylinders is on top of the existing subsidy, with the total subsidy amounting to Rs 703 for Ujjwala beneficiaries.

Statistics:

  • The price of a 14.2-kg LPG cylinder in New Delhi will decrease from Rs 1,103 to Rs 903.
  • The total public subsidy for the 2023-24 fiscal year is expected to cost the exchequer around Rs 7,680 crore.
  • The additional subsidy on LPG cylinders will benefit Ujjwala scheme subscribers with a total subsidy amount of Rs 703.
  • Hindustan Petroleum Corporation's (HPCL) stock price declined 2.5% to Rs 350.20.
  • Bharat Petroleum Corporation's (BPCL) stock price fell 1.5%.

Sources:

  • IANS: official sources
  • Anurag Thakur, Information and Broadcasting Minister ( quotes and statements )
  • Economic Times ( disclaimer )