Since all PSU oil companies are cash rich and pay high dividends, the removal of dividend tax will make these stocks more attractive. The dividend distribution tax is unlikely to result in lower pay out as government have been favouring high payouts from PSUs. Additional cess on petrol and diesel will have an adverse impact of the bottomline of companies, unless passed on to customers.
Wish List
Specific excise duty on petroleum products
Infrastructure status to pipelines
Maintain current duty differential between crude and petroleum products
What they got
Additional cess on motor spirit and high speed diesel
Customs duty structurefor crude and petro products unchanged
National calamity contingency duty (NCCD) on domestic and imported crude oil
BPCL
The Rs 0.50 additional cess on petrol and diesel may be passed on to cutomers and hence will have no impact.
The Rs 50 per tonne NCCD on domestic and imported crude oil will have a adverse impact on the gross refining margins. Rs 28 crore hit on bottomline.
The government has maintained a status quo on the amount of subsidy available on Kerosene and on LPG. Based on current prices, the estimated loss to companies could be 180 crore.
Dividend distribution tax will mean lower profit retention
