Is the ghost of past subsidies, under-recoveries troubling IndianOil?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
17 hours ago
- Business Standard
ONGC, RIL, HPCL: Nifty Oil & Gas slips 1%; check reasons, recommendations
Oil & gas-related stocks were under pressure in trade on Tuesday, August 5, 2025. On the National Stock Exchange (NSE), the Nifty Oil & Gas index declined 1.3 per cent to day's low at 11,001.25. Last checked, 12 out of 15 stocks were trading with losses on Nifty Oil & Gas. Among others, Mahanagar Gas was down 2.9 per cent, Hindustan Petroleum Corporation 1.57 per cent, Petronet LNG 1.54 per cent, Reliance Industries (RIL) and Gail India were down 1 per cent. Why are oil & gas stocks falling? The sell-off in the stocks came after US President Donald Trump on Monday stepped up pressure on New Delhi, threatening to 'substantially' raise tariffs on inbound shipments from India over the purchase of a 'massive' amount of Russian crude oil. 'India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits. They don't care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the US,' he wrote on Truth Social. India imports a third of its total crude from Russia, making the country New Delhi's largest crude supplier. India is also the second-largest buyer of Russian crude, after China. India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1 per cent from a year ago, according to news agency Reuters. Responding to Trump's statement, the Ministry of External Affairs (MEA) called the move 'unjustified and unreasonable.' The ministry stressed that India's energy ties with Russia are driven by national "necessity" and are far smaller in scale compared to trade between Russia and the West. How will India's stoppage of Russian crude imports hit Oil & Gas companies? JM Financial Institutional Securities believes that if India stops importing crude oil from Russia, it could hit Indian refiners' gross refinery margins (GRM) by $1-1.5 per barrel, as the Russian crude discount is $3-4 per barrel. Additionally, Russian crude constitutes 30-40 per cent of India's crude requirement. Every $1 per barrel will have a negative impact on FY26 Earnings before interest, tax, depreciation and amortisation (Ebitda) of— 8-10 per cent for oil market companies (OMCs); 20-25 per cent for Mangalore Refinery & Petrochemicals/Chennai Petroleum Corporation; and 2 per cent on RIL's consolidated Ebitda. What to do with oil & gas stocks? JM Financial has maintained a 'Sell' rating on Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOCL). The brokerage has reiterated its 'Hold' call on Bharat Petroleum Corporation (BPCL). JM sees the risk-reward not favourable for HPCL, BPCL and IOCL, given their aggressive capex plans, valuations being 10-30 per cent above the historical average (at 1.4x FY27 PB for HPCL/BPCL and 0.9x FY27 PB for IOCL) and risks to sustainability of current high marketing margin. On Oil and Natural Gas Corporation (ONGC) and Oil India, the brokerage has maintained 'Buy' as it believes they are key beneficiaries of high crude price, while their current marlet prices are discounting $60 per barrel crude realisation; every $1 per barrel higher oil price boosts their consolidated earnings per share (EPS) by 1.3-1.8 per cent.
Mint
2 days ago
- Mint
Dividend Stocks: Britannia, Coal India, Hyundai Motor, among others to trade ex-dividend next week; Full list
Dividend Stocks: Shares of major companies, including Britannia Industries, Coal India, Hyundai Motor Co., Berger Paints, IOCL, Mankind Pharma, and Kirloskar Industries, are among others that will trade ex-dividend in the week starting Monday, 4 August 2025. The ex-dividend date is when the equity share price adjusts itself to reflect the next dividend payout. This day, the stock becomes ex-dividend, which means the shares do not carry the value of its next dividend payment from that day forward. The dividend issue will be payable to all the shareholders whose names appear on the company's list by the end of the record date. As per the BSE data, many companies also announced other corporate actions, including a bonus issue. Britannia Industries Ltd, Coromandel Agro Products & Oils Ltd, Deepak Nitrite Ltd, Emkay Global Financial Services Ltd (Special dividend + Final dividend), Fairchem Organics Ltd, Gail (India) Ltd, Gandhi Special Tubes Ltd, Greenply Industries Ltd, KCP Ltd, KELTECH Energies Ltd, Praj Industries Ltd, and Westlife Foodworld Ltd. Aayush Wellness Ltd, Alembic Ltd, Automotive Axles Ltd, Indef Manufacturing Ltd, Benares Hotels Ltd, Berger Paints India Ltd, Century Enka Ltd, Chambal Fertilisers & Chemicals Ltd, DCM Shriram Ltd, Hyundai Motor India Ltd, Indag Rubber Ltd, Ipca Laboratories Ltd, Jay Shree Tea & Industries Ltd, Ltd,Prima Plastics Ltd,Share India Securities Ltd,Shreyans Industries Ltd, Shreyans Industries Ltd,Tips Music Ltd, andVA Tech Wabag Ltd. Adf Foods Ltd, The Anup Engineering Ltd, AVT Natural Products Ltd, Blue Dart Express Ltd, Bombay Dyeing & Manufacturing Company Ltd, Coal India Ltd, DMR Hydroengineering & Infrastructures Ltd, East India Drums and Barrels Manufacturing Ltd, Fermenta Biotech Ltd, Great Eastern Shipping Company Ltd, Grauer & Weil India Ltd, Hester Biosciences Ltd, Kirloskar Industries Ltd, Kriti Nutrients Ltd, Dr. Lal PathLabs Ltd, Mercury Laboratories Ltd, Rajratan Global Wire Ltd, The Ramco Cements Ltd, and Ramco Industries Ltd. Avanti Feeds Ltd, Bayer CropScience Ltd, CCL Products (India) Ltd, Chembond Chemicals Ltd, Dhunseri Investments Ltd, Disa India Ltd, Esab India Ltd, La Opala RG Ltd, Linde India Ltd, Lumax Industries Ltd, Lumax Auto Technologies Ltd, Mysore Petro Chemicals Ltd, Nava Ltd, PI Industries Ltd, Sharda Cropchem Ltd, and Symphony Ltd. Alkem Laboratories Ltd, Alldigi Tech Ltd, Computer Age Management Services Ltd (CAMS), Ceat Ltd, Flair Writing Industries Ltd, Gujarat Containers Ltd, Gujarat Hotels Ltd, Hindalco Industries Ltd, Indian Oil Corporation Ltd (IOCL), Jtekt India Ltd, Kronox Lab Sciences Ltd, Mankind Pharma Ltd, Ltd, Multi Commodity Exchange of India Ltd (MCX), Oriental Aromatics Ltd, Paras Defence and Space Technologies Ltd, Premco Global Ltd, Quess Corp Ltd, Shilchar Technologies Ltd, Shradha AI Technologies Ltd, Sonata Software Ltd, Steelcast Ltd, Varroc Engineering Ltd, Vishnu Chemicals Ltd, Voith Paper Fabrics India Ltd, Wonderla Holidays Ltd, and ZF Commercial Vehicle Control Systems India Ltd. Murae Organisor Ltd: declared a bonus issue of shares at a ratio of 1:10. Shares will trade ex-bonus on Thursday, 7 August 2025. Nestle India Ltd: declared a bonus issue of shares at a ratio of 1:1. Shares will trade ex-bonus on Friday, 8 August 2025. A bonus issue is a corporate action that allows existing shareholders to subscribe for additional shares. Instead of increasing the dividend payout, companies offer to distribute additional shares to the shareholders. For example, the company may give out one bonus share for every ten shares held. Cube Highways Trust: Income Distribution (InvIT) on Monday, 4 August 2025. Indus Infra Trust: Income Distribution (InvIT) on Monday, 4 August 2025. Nexus Select Trust: Income Distribution RITES on Monday, 4 August 2025. Embassy Office Parks REIT: Income Distribution RITES on Tuesday, 5 August 2025. Brookfield India Real Estate Trust REIT: Income Distribution RITES on Wednesday, 6 August 2025. Davangere Sugar Company Ltd: Rights Issue on Wednesday, 6 August 2025. Mindspace Business Parks REIT: Income Distribution RITES on Thursday, 7 August 2025. Anzen India Energy Yield Plus Trust: Income Distribution RITES on Friday, 8 August 2025. POWERGRID Infrastructure Investment Trust: Income Distribution (InvIT) on Friday, 8 August 2025. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
New Indian Express
3 days ago
- New Indian Express
Will US tariffs and shrinking discounts force India to abandon Russian crude?
In February 2021, India's crude oil import strategy underwent a significant shift as the country began substantially increasing imports from Russia. Within a few months, Russian Urals crude—which previously accounted for just 0.2% of India's total crude imports—emerged as a top supplier, surpassing Iraq and Saudi Arabia. Imports peaked at 2.15 million barrels per day (bpd) in May 2023 and have since fluctuated based on discounts and global market dynamics. This diversification coincided with the Russia–Ukraine conflict and was not well-received by Western nations, which accused India of indirectly supporting Russia's war efforts by keeping its economy afloat. As Europe shunned Russian energy to weaken Moscow's finances, Russia redirected its supply toward Asia. China emerged as the top importer, buying nearly half of Russia's crude oil, followed by India, Turkey, and some European countries, including Hungary and Slovakia. India's Petroleum Minister Hardeep Singh Puri has repeatedly asserted that India—the world's third-largest oil consumer—has diversified its sources from 27 to 40 countries and will continue to buy crude from any source offering the best deal. Indeed, Russia remained India's top crude supplier during the first half of 2025, with an average of 1.67 million bpd, marginally higher than the 1.66 million bpd during the same period last year. However, the situation grew more complicated on July 30, 2025, when US President Donald Trump announced a 25% reciprocal tariff on Indian imports, along with additional penalties linked to purchases of Russian crude. This marked an escalation in Western efforts to pressure India to stop importing Russian oil, in hopes of further weakening Moscow's energy-dependent economy. This raises a pressing question: Will India continue importing Russian Urals, or will it be forced to return to its traditional suppliers? Why India Needed Discounted Russian Crude India is heavily reliant on crude oil, importing about 88% of its total consumption. With a daily consumption of 5.8 million barrels in 2024, India ranks third globally, behind the US (20.3 million bpd) and China (16.5 million bpd). Importantly, India doesn't just buy crude for domestic use but also processes and exports it. With the world's fourth-largest refining capacity at 5.17 million bpd, India exported petroleum products worth $60.07 billion in FY 2024–25 (April 2024 to March 2025). Key export destinations include the Netherlands, UAE, Singapore, and Australia. This makes access to cheaper crude critical for both domestic consumption and maintaining refining profitability. Both public sector companies—Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL)—and private players like Reliance Industries and Nayara Energy have been major importers of Russian crude. Notably, Indian refiners have primarily sourced Russian oil through the spot market. According to the Commerce Ministry, India exported 4.86 million tonnes of petroleum products worth $4 billion to the US alone in FY 2024–25. Reliance Industries is the largest exporter of fuel to the US. As per GTRI data, India imported $50.3 billion worth of crude oil from Russia in FY2025—over one-third of its total crude bill of $143.1 billion. Exports to the EU dropped from $19.2 billion in FY2024 to $15 billion in FY2025, a 27.1% decline. The oil and gas sector is also a major contributor to government revenues. In FY 2024–25, it contributed ₹415,181 crore to the Central exchequer (down from ₹432,394 crore the previous year) through various taxes and duties. Contributions to the State exchequers rose to ₹325,583 crore (up from ₹318,762 crore), via VAT, royalties, and other levies. Can India Drop Russian Crude? While Russian crude has dominated India's oil basket over the past two years, this trend is drawing increasing scrutiny from Western governments. Recently, the European Union imposed fresh sanctions, including direct measures against Nayara Energy (formerly Essar Oil Ltd.), in which Russia's Rosneft holds a stake. Additionally, the EU has revised the G7-imposed price cap, reducing it from $60 per barrel to a dynamic cap set at 15% below the average market price of Urals crude (currently estimated at $47.60/bbl). These steps have made importing Russian crude more complex for India. Despite the pressure, experts believe that India can diversify its crude oil sources without much disruption. According to Prashant Vasisht, Senior VP and Co-Group Head, Corporate Ratings at ICRA, India has multiple alternatives and, until FY2023, sourced less than 2% of its crude from Russia. However, he warned that since Russian crude accounts for 7% of global supply, its exclusion from the market would push up global oil prices, affecting not just India but the broader energy market. 'If the discounts are removed, India's crude import bill would rise by less than 2%,' said Vasisht. Moreover, the discount on Russian crude has already shrunk. According to the Ministry of Commerce, Russian oil earlier came at a $10–16/bbl discount. At one point, the discount went as high as $30/bbl. Now, it has fallen to just $2.5–4/bbl, reducing the attractiveness of Russian crude. This explains why Indian refiners are open to increasing imports from Iraq, UAE, and Saudi Arabia—which together already supply 45–50% of India's oil—and even from the US, following a bilateral energy trade agreement signed in February 2025. As per S&P Global Commodity Insights, India imported 271,000 bpd of crude from the US between January and June 2025—a 51% increase from a year earlier. What Lies Ahead? While a complete exit from Russian crude is unlikely in the immediate term, a reduction in imports appears feasible. A senior official from the Petroleum Ministry clarified that Russian crude is not yet under formal sanctions, unlike oil from Iran and Venezuela, which Indian refiners avoid. Meanwhile, state-owned oil companies say they are awaiting the outcome of ongoing trade talks with the US, which may lead to reduced tariffs. Refiners are confident they have adequate supply options and are prepared to diversify further if directed by the government. For now, refiners remain in a 'wait and watch' mode, hoping for a diplomatic breakthrough that could lower trade tensions—and avoid significant disruption to India's energy security and refining economics.
