Shares of oil marketing companies gained up to 3% on Tuesday following the government's second petrol and diesel price hike in less than a week. According to latest market data, Indian Oil Corporation (IOC) shares surged 2.57% to hit an intraday high of ₹135.63 on the National Stock Exchange, while Hindustan Petroleum Corporation (HPCL) shares gained 2.83% to trade at ₹366.50. The Nifty Oil & Gas index rose 0.64% as of 10:18 AM, with the rally driven by both price hike relief and robust quarterly corporate earnings. Indian Oil's earnings report released late Monday provided a major boost, with the refining giant announcing a 78% year-on-year surge in consolidated net profit for Q4, reaching ₹14,458 crore compared to ₹8,123 crore in the same period last year.
The latest hike follows the government's increase in fuel prices by up to ₹3 per litre on Friday, with retail prices for petrol and diesel increasing by roughly 90 paise per litre on Tuesday. As reported by PTI, after the fresh hike, petrol price in Delhi now stands at ₹98.64 per litre, up from ₹97.77 per litre, while diesel costs ₹91.58 per litre against a previous price of ₹90.67. Kolkata saw the sharpest increase with petrol prices jumping 96 paise to ₹109.70 per litre and diesel rising 94 paise to ₹96.07 per litre. In Mumbai, petrol prices were increased by 91 paise while Chennai saw petrol prices go up by 82 paise.
The back-to-back price hike aims to alleviate financial pressure on OMCs amid escalating global crude prices, with global crude prices climbing more than 50% since the start of the conflict due to escalating geopolitical tensions between the US and Iran. According to The Economic Times, oil prices have mostly sustained above the $100 per barrel mark this year, with Brent crude trading above $110 per barrel and WTI Crude hovering near $108 per barrel on Tuesday morning. The ongoing conflict has disrupted vital trade lanes through the Strait of Hormuz, a narrow 33-kilometre waterway handling over 20% of world's daily oil and gas shipments. Bharat Petroleum Corporation (BPCL) also advanced 2.53% in Tuesday's trading session.
Indian Oil's revenue from operations for Q4 grew 7% to ₹2.37 lakh crore, with strong refining margins and steady revenues from the core petroleum business driving the performance. The positive earnings beat came despite significant marketing losses from freezing retail prices earlier in the year. As reported by The Economic Times, Nomura believes the upcoming refining capacities of IOC may help the company outperform other OMC peers given strong refining margins outlook and surplus petrol/diesel output from its own refineries. City gas distributors also mirrored the momentum, with Indraprastha Gas Limited (IGL) rising 2.10% after raising compressed natural gas prices by ₹1 per kg over the weekend. The consecutive fuel price hikes are expected to support the margins of oil marketing companies, which have been under pressure due to elevated crude oil prices.
