Shares of state-owned oil marketing companies experienced significant gains on Monday, with Hindustan Petroleum Corporation Ltd (HPCL) leading gains with a 5.8% rise to ₹412.55 on the NSE, according to The Hindu BusinessLine. Bharat Petroleum Corporation Ltd (BPCL) advanced 4.44% to ₹308.70, while Indian Oil Corporation (IOC) climbed 3.9% to ₹144.95. On the NSE, IOC was up 3.68% at ₹144.60 as of 12.40 IST, with its session high at ₹145.30. The strong performance across all major fuel retailers reflects investor confidence in the sector's improved margin outlook, with the combination of easing crude costs and higher retail selling prices widening marketing margins for state-run fuel retailers.
Petrol and diesel prices were raised by ₹2.61 per litre and ₹2.71 per litre respectively on Monday, marking the fourth increase in less than two weeks as reported by The Hindu BusinessLine. With the latest revision, cumulative increases in petrol and diesel prices have reached nearly ₹7.5 per litre since fuel price revisions resumed on May 15 after a prolonged freeze. In Delhi, petrol prices now stand at ₹102.12 per litre from ₹99.51, while diesel rates have climbed to ₹95.20 per litre from ₹92.49. In Mumbai, petrol costs ₹111.21 and diesel ₹97.83. The price revisions coincide with a sharp fall in global crude oil prices, with Brent futures dropping 5.7% to around $97.69 per barrel and WTI falling 6% to roughly $90.85, both touching their lowest levels since May 7.
State-owned Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd together control 90% of India's fuel market, as reported by The Hindu BusinessLine. The back-to-back increases come after global crude oil prices surged more than 50% following US-Israeli strikes on Iran in late February, with the sell-off following comments from US President Donald Trump indicating progress in negotiations with Iran on a memorandum of understanding that could lead to the reopening of the Strait of Hormuz, a critical chokepoint handling over one-fifth of the global oil and gas trade. Fuel retailers had in the first two-and-half-months of the conflict kept pump prices low despite rising input costs, a move the government said was aimed at shielding consumers from inflation.
The cumulative price increases have stoked concerns over inflationary pressures and higher transportation costs across the economy, according to The Hindu BusinessLine. The sharp rise in fuel prices is expected to have a cascading impact on multiple sectors, with transporters likely to transfer additional burden to consumers, potentially leading to inflation across multiple sectors. IOC reported that retail sales of diesel for May 1-22 rose by 18% from a year earlier, while petrol sales were up by 14%, as reported by Reuters. Rising diesel prices are expected to increase costs in the farm sector, particularly for irrigation and agricultural produce movement, just as the kharif sowing season approaches. Essential goods including vegetables, milk, and packaged foods are becoming more expensive as companies face higher distribution and input expenses, with fast-moving consumer goods companies already initiating price hikes amid rising fuel costs.
Despite Monday's gains, IOC, BPCL, and HPCL remain down 13-20% year-to-date in 2026, having been weighed down through much of the year by elevated import costs, according to The Hindu BusinessLine. IOC's 52-week high stands at ₹188.96 hit on February 27, against a 52-week low of ₹130.22 recorded on April 2. BPCL's 52-week high is ₹391.65 versus a low of ₹266.60. The combination of easing crude costs and higher retail selling prices is expected to improve profitability for OMCs, with lower crude prices reducing inventory losses and easing working capital pressure, factors that had squeezed profitability since crude surged more than 50% following the Iran conflict.
