Petrol and diesel prices have been hiked for the fourth time in just 11 days, with Indian oil marketing companies announcing an average hike of ₹2.7 per litre on Monday morning. According to reports from NDTV Profit, this follows a ₹3 per litre hike on May 15, and 90 paise hike each on May 19 and May 23, taking the cumulative hike to ₹7.5 per litre. The price increases are a desperate measure to help OMCs such as Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil Corporation (IOC) cut back on heavy losses they have been bearing since the start of the Iran War.
The price hikes come as crude prices have skyrocketed due to the closure of the Strait of Hormuz, a key oil supply chokepoint. As reported by NDTV Profit, this has directly impacted these OMCs, who had been keeping prices steady for the longest time, bearing heavy losses in the process. Petroleum Minister Hardeep Singh Puri had earlier revealed that OMCs have been bearing losses of around ₹1,000 crore daily and were staring at a loss of ₹1-1.2 lakh crore in the first quarter of FY27.
The recent price hikes have significantly helped OMCs recoup some of their losses. According to NDTV Profit, the first hike of ₹3 per litre helped them cut back on 25% of the daily losses. Up until the third hike, OMCs have already been able to cut back on ₹330 crore of daily losses. The recent average hike of ₹2.7 per litre would help these companies save on an additional ₹113 crore daily, bringing the total loss reduction to 44% of daily losses through the four price hikes in 11 days.
According to various analysts cited by NDTV Profit, every 50 paise per litre increase in fuel marketing margins is estimated to lift EBITDA by 7% for IOCL, 8% for BPCL and 11% for HPCL. The recent price hikes are expected to provide substantial relief to these companies, with the cumulative impact of the four hikes in 11 days representing a significant improvement in their financial position amid challenging market conditions.
