Shares of oil and gas companies were in demand in Monday's trade, with the Nifty Oil & Gas index rising 1.66% to 11,561, following another hike in petrol and diesel prices. According to reports from Business Standard, at 09:41 AM, the Nifty Oil & Gas index was up 1.01% at 11,496.15, led by gains in oil marketing companies (OMCs). The rally came despite oil prices slipping to a two-week low amid optimism over a potential US-Iran agreement.
Hindustan Petroleum Corporation (HPCL) was trading 4.11% higher, while Bharat Petroleum Corporation (BPCL) gained 3.5% and Indian Oil Corporation (IOCL) advanced 3.18%. Among other major players, GAIL (India) was up 3%, and Indraprastha Gas, Petronet LNG, and Aegis Vopak Terminals gained over 2% each. As reported by Business Standard, Mahanagar Gas, Aegis Logistics, Adani Total Gas, Chennai Petroleum Corporation, Reliance Industries, and Castrol India were trading higher by up to 1.8%.
Petrol and diesel prices were raised by ₹2.61-2.71 per litre on Monday, marking the fourth increase in less than two weeks as state-owned fuel retailers continued to pass on rising international oil prices to consumers. According to industry sources cited by Business Standard, petrol prices were increased by ₹2.61 per litre and diesel by ₹2.71 per litre. In Delhi, petrol prices were raised to ₹102.12 per litre from ₹99.51 earlier, while diesel prices increased to ₹95.20 per litre from ₹92.49. With the latest revision, cumulative increases in petrol and diesel prices have nearly touched ₹7.5 per litre since fuel price revisions resumed on May 15 after a prolonged freeze.
Oil prices fell about 6% on Monday, hitting two-week lows as optimism increased that the United States and Iran are edging closer to a potential peace agreement. As reported by Business Standard, Brent crude was down 4% at $99 per barrel, while WTI crude declined 4.5% to $92.5 per barrel. However, the two sides remain divided over major sticking points, including issues related to control and blockades in the Strait of Hormuz. US President Donald Trump, in a Truth Social post, said negotiations with Iran were "proceeding in an orderly and constructive manner", adding that he had instructed his representatives "not to rush into a deal as time is on [their] side."
The sharp rebound in oil and gas stocks, particularly the OMCs, reflects the market's relief that the government is unlikely to allow sustained under-recoveries for fuel retailers. According to Raghunath Capital's Sourav Choudhary, "This gradual pricing action signals a clear intent to protect OMC balance sheets from prolonged losses, which were estimated at nearly ₹1,000 crore per day at one stage, and that reassurance is now being positively reflected in stock price." The back-to-back hikes follow a prolonged freeze in retail fuel prices and come amid elevated global crude oil prices, tightening refining margins, and a weaker rupee, which have significantly increased import costs. In contrast to the positive performance of OMCs, Oil and Natural Gas Corporation (ONGC) and Oil India were trading lower by 1.21% and 2.31% respectively.
