Shares of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL) rose on January 21 following reports of the Oil Ministry seeking and likely securing ₹40,000 crore in LPG subsidies for FY26, according to CNBC-TV18. This move is expected to ease the financial burden caused by under-recoveries from LPG sales.
Key Stock Movements:
- Indian Oil Corporation (IOC): Shares gained 1.17%, trading at ₹132.03. IOC accounted for over 50% of total LPG under-recoveries in H1 FY25, estimated at ₹17,500 crore.
- Hindustan Petroleum Corporation (HPCL): Shares rose by 2.72%, reaching ₹370.15 intraday, driven by optimism surrounding the government’s support measures.
- Bharat Petroleum Corporation (BPCL): BPCL stock increased by 1.68%, trading at ₹281.95, with expectations of improved fiscal stability.
Sector Insights:
- The total LPG under-recoveries for H1 FY25 were pegged at ₹17,500 crore, highlighting the urgent need for subsidies.
- Reports suggest the ₹40,000 crore subsidy proposal is on track for approval, signaling strong government backing for the oil marketing sector.
Market Impact:
The anticipated subsidy approval has lifted investor sentiment, particularly for IOC, HPCL, and BPCL, with expectations of improved financial performance and reduced operational risks.
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