Negatives: Weakness in the Indian Rupee (INR) and Gross Refining Margins (GRMs).Positives: Lower oil prices, strong auto fuel demand, and minimal government intervention.
HSBC has maintained a ‘Buy’ rating on BPCL, with a target price of ₹440, HPCL with a target price of ₹450, IOC with a target price of ₹170.
Earlier on Monday, the government decided to exclude LPG compensation in the second supplementary demand for grants.The petroleum ministry had requested ₹35,000 crore in LPG compensation for FY25. In the first nine months of FY25 (9MFY25), OMCs reported total LPG under-recoveries of ₹29,223 crore, with Q3FY25 witnessing a 67% surge in such losses.
Speaking to CNBC-TV18, Union Minister Hardeep Singh Puri said the government is committed to compensating losses of OMCs. “Even when we got it from Rs 28,000 crore there was an under-recovery on LPG, we gave them Rs 22,000 crore.”
Puri said, “Don’t need a budgetary provision, can go to the Finance Ministry otherwise.”
“If OMCs behave like good corporate citizens and have under recoveries, we are committed to compensate them,” the minister added.
Earlier in 2022, the government had granted ₹22,000 crore in compensation to OMCs for a cumulative loss of ₹28,000 crore. Oil Secretary Pankaj Jain had earlier said that the MoPNG had urged the finance ministry to provide compensation for LPG under-recoveries.
IOC shares are trading 1.60% higher at ₹123.53, those of BPCL are trading 0.74% higher at ₹258.84, while those of HPCL are trading 0.46% higher at ₹327.30.
