Indian oil marketing companies have introduced another 90 paise hike on Tuesday morning, taking the total fuel price increase to ₹3.9 per litre. According to PTI reports, this follows an earlier announcement of a ₹3 per litre price hike in diesel and petrol, making it a significant move by the Indian OMCs. The latest hike affects both petrol and diesel prices across the country, with petrol prices rising by 87 paise to ₹98.64 per litre and diesel prices increasing by 91 paise to ₹91.58 per litre in Delhi. As per The Financial Express, this marks the second increase within a week, following the first revision in more than four years.
The fuel price hikes are designed to help Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL), and Indian Oil Corporation (IOCL) reduce their substantial losses. As reported by NDTV Profit, Petroleum Minister Hardeep Singh Puri indicated that Indian OMCs are incurring losses of ₹1-1.2 lakh crore in Q1FY27 due to the West Asia conflict. This translates to a daily cumulative loss of ₹1,100-1,300 crore per day that these companies are absorbing, making long-term sustainability effectively impossible. According to IDFC First Bank, given the under-recoveries faced by OMCs, further increases in retail petrol and diesel prices are expected, with cumulative rise of up to 10% spread over the next few months.
The latest fuel price increases have kept oil marketing company stocks in focus, with Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation recovering from previous losses. As reported by NDTV Profit, shares of IOCL, BPCL, and HPCL opened nearly 2% higher each and traded in green amid broader positive sentiment across domestic frontline indices. On the NSE, HPCL shares traded 2.15% higher at ₹366.50, IOCL traded 2.24% higher at ₹134.76, and BPCL shares were down 2.67% lower at ₹288.30. The NSE benchmark Nifty 50 rose up to 0.4% to 23,734 while the BSE Sensex gained nearly 0.5% or 340 points to 75,656 after the opening bell.
According to brokerages, the latest price hikes will significantly boost OMCs' recovery capabilities. As reported by NDTV Profit, every half a rupee per litre increase in fuel marketing margins is estimated to lift EBITDA by 7% for IOCL, 8% for BPCL and 11% for HPCL. The total fuel consumed in India now stands at 463 million litres per day, with OMCs having a 90% market share in the space. This means a total of 417 million litres per day of petrol/diesel is consumed in pumps owned by HPCL, BPCL and IOCL. Taking into account the 90 paise hike, these companies will be able to recoup ₹38 crore per day, while combining both hikes enables them to recoup ₹163 crore per day, which is roughly 12.5-14.8% of the estimated daily loss they are bearing.
