OMC Stocks Rise Up To 3% As Fuel Hike, IOC Earnings Lift Sentiment

Shares of state-run oil marketing companies (OMCs) rose up to 3% on Tuesday morning as investors cheered another round of fuel price hikes and stronger-than-expected quarterly earnings, offering some relief to a sector grappling with elevated global crude prices and margin pressures.

By 11:23 am, the Nifty Oil & Gas index was trading 0.87% higher, supported by gains in major OMC stocks after fuel retailers revised petrol and diesel prices for the second time in less than a week.

Among the gainers, Indian Oil Corporation (IOC) climbed 3% to touch an intraday high of ₹135.95 on the NSE. Shares of Hindustan Petroleum Corporation (HPCL) advanced 3.34% to ₹370.50, while Bharat Petroleum Corporation (BPCL) gained nearly 3% to trade at ₹288.30.

City gas companies also participated in the rally. Indraprastha Gas Limited rose 2.1% after increasing compressed natural gas prices by ₹1 per kg over the weekend.

Fuel Price Hike Supports Margins

The rally followed fresh revisions in fuel prices as state-run retailers raised petrol and diesel prices for the second time in seven days amid volatile crude markets. Petrol prices increased by around ₹0.86 per litre and diesel by ₹0.83 per litre across the country. Following the revision, petrol in Delhi rose to ₹98.64 per litre, while diesel prices increased to ₹91.58 per litre.

The latest move came just days after petrol and diesel prices were raised by ₹3 per litre each — the first such increase in four years.

The increase in retail fuel prices is expected to partly offset losses incurred by OMCs due to elevated crude prices, as higher selling prices improve marketing margins. Investors interpreted the move as a sign that companies may gradually recover some of the pressure created by absorbing higher energy costs.

IOC Earnings Add To Optimism

Investor sentiment also received a boost after IOC reported strong quarterly numbers. The company posted a 78% year-on-year rise in consolidated net profit for the March quarter at ₹14,458 crore compared with ₹8,123 crore a year ago.

Revenue from operations increased 7% to ₹2.37 lakh crore, supported by stronger refining margins and stable core business performance.

The earnings beat came despite significant losses incurred due to frozen retail fuel prices earlier in the year. Trading activity also reflected strong institutional participation, with IOC volumes crossing 73 lakh shares by mid-session.

Global Risks Continue

Despite Tuesday's rally, concerns around the broader energy environment continue to persist. India imports nearly 85% of its crude oil requirements, making the country highly sensitive to global supply disruptions and geopolitical developments.

Crude prices have surged sharply following tensions involving the US and Iran and concerns around disruptions through the Strait of Hormuz, one of the world’s most important oil transit routes. Brent crude had earlier climbed above $120 per barrel before cooling slightly. It is currently hovering around the $107-$109 range. Before the conflict began in late February, Brent was trading near $70 per barrel.

There was some relief after US President Donald Trump said there was a "very good chance" of a nuclear agreement with Iran. Following his comments, Brent crude futures declined more than 2% to around $109.41 per barrel.

Analysts said any sustained easing in crude prices could improve the outlook for downstream oil companies, although sector performance will remain closely tied to geopolitical developments and fuel pricing decisions.