Hindustan Petroleum Corporation Ltd (HPCL) shares climbed 2.17% to ₹360.45 in Monday’s session after the central government increased excise duty on petrol and diesel by ₹2 per litre effective April 8, 2025. The move is expected to enhance the government’s revenue by about ₹32,000 crore annually while retail fuel prices remain unchanged, thanks to falling international oil prices.
As per the Finance Ministry notification, excise duty on petrol will now stand at ₹13/litre, while diesel will be taxed at ₹10/litre. The hike will be absorbed by oil marketing companies (OMCs) such as HPCL, BPCL, and IOC, leveraging the margin cushion created by a sharp drop in global crude prices.
Brokerage CLSA noted that this duty hike equates to a crude price increase of just US$4/bbl, while global prices have dropped by US$12/bbl in recent sessions. CLSA expects this to support OMC profitability and reduce LPG under-recoveries, especially after the Centre also raised domestic LPG prices by ₹50 per cylinder.
Despite this relief, CLSA cautioned that retail price cuts could follow if crude oil prices stay below US$70/bbl, which might temper investor enthusiasm in the coming weeks.
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