India’s liquefied petroleum gas (LPG) sector is vital to its energy transition, with consumption growing 6.5 percent in FY25, reaching 2.72 million tons in March alone. The market is projected to expand at a CAGR of 3.5 percent from 2025 to 2030, driven by residential and industrial demand, despite financial challenges
On Monday, the government of India decided to increase the price of household Liquefied petroleum gas by Rs 50 per cylinder starting from today, additionally, the special additional excise duty on petrol and diesel will be increased by Rs 2 per liter.
Moreover, the LPG price hike will address ongoing losses faced by the OMCs. Currently, these companies are incurring a loss of up to Rs 250 per cylinder, and the price increase will help reduce this burden to around Rs 200 per cylinder.
Additionally, the government also announced a hike in duty on petrol and diesel will fetch the government Rs 32,000 crore in additional revenue in a year. These funds will be directed to the central government and are intended to cover LPG subsidy dues for FY25, which are estimated at Rs 41,338 crore.
CLSA noted that the recent excise duty hike on petrol and diesel, around $4 per bbl, is only a third of the $12 per bbl crude price drop over three sessions. It expects this to boost government tax collections by $4 billion, while marketing margins remain above recent quarterly averages.
Here are the stocks that can benefit from the government raising the price of liquefied petroleum gas:
1. Bharat Petroleum Corporation Ltd
Bharat Petroleum Corporation Limited is an India-based firm that produces, refines, and distributes petroleum products. Its offerings include fuel services, Bharatgas, and MAK Lubricants, refineries, gas, industrial and commercial, international trading, and proficiency testing. With a market capitalization of Rs 1.22 lakh crore, the shares were trading at Rs 283.15 per share, increasing around 3.19 percent as compared to the previous closing.
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2. Hindustan Petroleum Corp Ltd
Hindustan Petroleum Corporation Limited company that is engaged in the business of refining crude oil and marketing petroleum products, producing hydrocarbons, and providing services for the management of exploration and production (E&P) blocks, generation of power, and operating liquefied natural gas (LNG). With a market capitalization of Rs 77,442.10 crore, the shares were trading at Rs 363.90 per share, increasing around 2.99 percent as compared to the previous closing.
3. Indian Oil Corporation Ltd
Indian Oil Corporation Limited is an India-based oil company. The Company’s segments include Petroleum Products, Petrochemicals, and Other Business Activities. Its Other Business Activities segment includes the gas, oil, and gas exploration activities, explosives and cryogenic business, and windmill and solar power generation. With a market capitalization of Rs 1.83 lakh crore, the shares were trading at Rs 130.30 per share, increasing around 1.52 percent as compared to the previous closing.
Written by Abhishek Singh
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