Shares of major oil marketing companies rallied strongly on Monday following fuel price hikes announced earlier in the morning. According to reports from NDTV Profit, Hindustan Petroleum Corporation Limited (HPCL) led gains with a 4% increase, while Bharat Petroleum Corporation Limited (BPCL) rose 3.1% and Indian Oil Corporation (IOC) gained nearly 2.8% in Monday's trading session.
The positive momentum in oil marketing companies was directly linked to an average price hike of ₹2.7 per litre for petrol and diesel announced early Monday morning. As reported by NDTV Profit, this marked the fourth fuel price hike in just 11 days, demonstrating the rapid pace at which these companies are adjusting fuel prices in response to market conditions.
The fuel price hikes represent a strategic move by oil marketing companies to address significant financial challenges. According to NDTV Profit, fuel price hikes are seen as key pivots by OMCs to cut back on heavy losses incurred since the start of the Iran War. With crude prices constantly averaging above the $105 per barrel mark, these companies have been bearing substantial costs to maintain steady fuel prices in India, with Petroleum Minister Hardeep Singh Puri pointing towards losses of around ₹1,000 crore daily.
The four fuel hikes implemented over the past 11 days have proven effective in reducing the financial burden on oil marketing companies. As reported by NDTV Profit, OMCs have been able to cut back on 44% of the losses through these price adjustments, according to various analyst estimates. This significant reduction in losses is contributing to the positive sentiment surrounding these stocks in the current market environment.
