Implications of Central Government cutting excise duty on Fuel prices

This is a reasonably good news for consumers as this is a decent cut in excise duty on fuel prices. There’s also a 200 rs cut on gas cylinders.

Following points to be noted :

  • As there is no upmove in fuel prices from April 6th inspite of rise in global crude prices, it most likely means the OMCs were facing losses till now and this excise cut should ease some pressure on OMCs

  • Basically, fuel prices are back to square one (in last one year) in most of the states despite crude prices doubling.

  • Central govt has done a price cut of 13-15 rs in last 7 months…which looks pretty decent.

  • As OMCs are under margin pressure, the pre excise cut prices may be back in a month or two…if crude prices remain elevated.

  • There should be a reasonable relief in Inflation in the short run.

  • Bond yields may remain at higher levels as govts revenue will be compromised to the tune of almost 1.1 Lac crore because of these cuts.

  • The effect on stock market? Some relief for consumer facing stocks and if Inflation is under control, massive rate hike worries waning may also help financials.

Do add any other points if I have missed any and share yours views on the above topic

We have been buying record levels of oil from Russia at deep discounts… some rumoured to be around $70.

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The first remedy step for recession is tax cut. I believe this is just step one. Going further they might reduces taxes to increase spending.

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Metal stocks are butchered with many of them trading at LC. Index is down 8.5% due to the impact of export tariff hike.

I think there will be short term pressure on commodity rally driven stocks…and the consumers will be postively impacted like autos

Not for everyone.
200 rs. subsidy for Ujjwala yojna beneficiaries only. No price cut.

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