Budget 2025: HPCL, BPCL, ONGC Share Prices Slide As Government Skips LPG Compensation

Ahead of the Budget, analysts had anticipated measures to address losses in the liquefied petroleum gas segment, which has weighed on profitability.

Neha Aravind

01 Feb 2025, 02:54 PM IST i

<div class="paragraphs"><p>Hindustan Petroleum shares fell as much as 7.02% during the day to Rs 333.10 apiece on the NSE. (Representative image. Photo source: Canva stock)</p></div>

Hindustan Petroleum shares fell as much as 7.02% during the day to Rs 333.10 apiece on the NSE. (Representative image. Photo source: Canva stock)

Shares of Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Oil and Natural Gas Corp. and other oil firms were trading lower on Saturday, after the centre did not announce subsidies for LPG losses incurred by companies in fiscal 2025 in the Union Budget 2025–26.

Finance Minister Nirmala Sitharaman presented the budget on Feb. 1.

While the government provided Rs 22,000 crore in compensation for oil marketers in fiscal 2023, no relief was announced in fiscal 2024 or the current fiscal.

This is expected to severely affect margins of these companies who have already been facing losses on their LPG sales all of fiscal 2025, due to the ministry regulations. In the first half of financial year 2025, Bharat Petroleum and Hindustan Petroleum made LPG losses of Rs 4,100-4,200 crore. Indian Oil's losses stood higher at around Rs 8,800 crore.

Ahead of the Budget, analysts had anticipated measures to address losses in the liquefied petroleum gas segment, which has weighed on profitability. Macquarie and IIFL Securities analysts expected the Budget to include compensation for these losses.

Additionally, the oil and gas industry has long sought the inclusion of petroleum products under the Goods and Services Tax regime, but opposition from state governments has kept petrol, diesel, natural gas, and aviation turbine fuel outside the GST framework.