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State-Run Oil Companies’ Capex to go Up by 6.5% in FY22

Capital spending at Oil and Natural Gas Corp is targeted to drop 8 per cent in 2021-22 from the current year while it’s set to expand 9 per cent at Indian Oil and 26 per cent at Hindustan Petroleum, according to the budget document. State-run oil companies have planned a combined capex of Rs 105,000 crore in FY22, up 6.5 per cent from the current year’s target. In the first three quarters of the current year, state oil companies have together spent Rs 58,500 crore, or 60 per cent of their combined annual target, the pace being slow mainly due to the disruptions caused by the pandemic.

ONGC, traditionally the biggest spender among oil companies, has set a target of Rs 29,800 crore for the next year against a target of Rs 32,500 crore for the current year. Indian Oil Corp, the nation’s largest refiner and usually the second-biggest spender among state oil firms has planned a capex of Rs 28,500 crore, up from the current year’s Rs 26,200 crore. The company aims to spend a little more than Rs 4,000 crore of its total outlay on expanding its highly-profitable petrochemical business.

Hindustan Petroleum has planned a big jump of 26 per cent in its capital spending to Rs 14,500 crore. Most of its money is set to go into its new refinery project at Rajasthan and in strengthening its marketing infrastructure.

Bharat Petroleum, which is in the middle of a privatization process, plans to spend Rs 10,000 crore, up 11 per cent from the current year. GAIL, the largest natural gas marketer and transporter in the country, has increased its Capex target by about a tenth to Rs 6,000 crore. Oil India Limited has also elevated its Capex target for next year by 6 per cent to Rs 4,100 crore.

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