BPCL Slumps on Petrol, Diesel Excise Duty Hike

The government on Tuesday announced a Rs 2.25 per litre hike in excise duty on petrol effective tonight. The excise duty on diesel has been raised by Rs 1 per litre. The move is aimed to boost revenues and contain budget borrowing, analysts say.

Shares in state-run oil marketing (OMCs) companies fell sharply because higher duties are unlikely to be passed on to consumers. That means state-run refiners may witness pressure on their margins. OMCs are also likely to put off a cut in the retail prices if crude continues to weaken in future.

BPCL was the top loser in the Nifty, ended 4.27 per cent lower. HPCL and Indian Oil Corp. also fell between 1.5 and 3 per cent. These stocks underperformed the oil and gas sub-index on the BSE, which ended 0.6 per cent lower on Tuesday.

The government is likely to raise Rs 4,000 crore in revenues from excise hike, analysts estimated.