Shares of oil marketing companies like Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd were up over 3 per cent as the Finance Ministry has finally reduced the basic excise duty on petrol and diesel by ₹2 a litre, effective Wednesday.
The S&P BSE Oil & Gas index jumped as much as 1.6 per cent. Shares of Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) were trading higher by 1.16 per cent, 0.61 per cent and 0.09 per cent at Rs 439.65, Rs 409.05 and Rs 479.30, respectively.
After the cut, the retail price of petrol in Delhi is expected to be near ₹68 a litre, while that of diesel, ₹57.
Oil marketing firms were getting a hit on their marketing margin as a result of high domestic fuel prices, says Nitin Tiwari, VP of research, Antique Stockbroking Ltd.
The cut in excise duty is seen as a relief as these firms will be able to exercise flexibility in terms of determining marketing margins, Tiwari says.