OMC Stocks Slide Despite ₹3 Fuel Price Hike; HPCL, BPCL Fall Up To 3%

Shares of oil marketing companies (OMCs) came under pressure on Friday despite the government increasing petrol and diesel prices by up to ₹3 per litre, as investors worried that the hike may not be sufficient to offset mounting losses from elevated global crude prices.

Shares of Hindustan Petroleum Corporation (HPCL) led the decline, falling 3% to ₹366. Bharat Petroleum Corporation (BPCL) dropped 2.78% to ₹286, while shares of Indian Oil Corporation (IOC) also traded lower.

City gas distribution firms including Mahanagar Gas, Indraprastha Gas and Gujarat Gas also edged lower, though losses remained relatively modest.

The decline came after the Centre increased fuel prices with immediate effect amid continuing disruptions across the Strait of Hormuz and rising pressure on India's energy supply chain.

Following the revision, petrol prices in Delhi rose to ₹97.77 per litre while diesel climbed to ₹90.67 per litre. Kolkata saw the steepest increase among metros, with petrol prices rising to ₹108.74 per litre. Mumbai and Chennai also recorded increases.

Why Investors Remained Unimpressed

Although the fuel price hike was expected to provide some relief to OMCs, analysts believe the increase remained substantially below the levels needed to offset current under-recoveries.

Brokerage estimates suggest state-run refiners continue to absorb significant losses as they sell fuel below market-linked prices despite rising global crude costs.

Emkay Global estimated under-recoveries at ₹17-18 per litre at prevailing crude prices, even after excise reductions earlier this year. The brokerage projected quarterly losses of nearly ₹57,000-58,000 crore for OMCs.

Meanwhile, Nomura estimated that fuel prices would need to rise by ₹15-20 per litre for OMCs to stop incurring losses completely.

As a result, investors viewed the latest ₹3 increase as insufficient to materially improve earnings visibility.

Crude Prices

OMC shares have already fallen sharply this year as rising geopolitical tensions and energy disruptions weighed on profitability. HPCL, BPCL and IOC have declined as much as 24% in 2026 so far amid the escalating global energy crisis.

Oil prices crossed the $100-per-barrel mark earlier this year following the outbreak of conflict in West Asia. Although prices later cooled from peaks near $130 per barrel, crude continues to remain elevated.

Brent crude traded above $107 per barrel, while West Texas Intermediate (WTI) remained above $102.

The prolonged closure and disruption around the Strait of Hormuz — through which over 20% of global oil shipments pass — has intensified supply concerns worldwide.

India's Oil Inventory Levels Shrink

Pressure on the sector has also increased because of declining domestic inventory levels.

According to commodities analytics firm Kpler, India's crude oil inventories have fallen around 15% since the Iran conflict began in late February.

India's total crude inventory now stands near 91 million barrels, down from around 107 million barrels earlier. The estimates include strategic petroleum reserves, refinery stocks and commercial inventories.

Analysts said prolonged supply disruptions may eventually force refiners to reduce crude processing or adjust operational levels.

PM Modi Pushes Fuel Conservation

Investor sentiment was also affected by Prime Minister Narendra Modi urging citizens to reduce fuel consumption amid the ongoing crisis.

Addressing a rally in Hyderabad, Modi called for "responsible living" and asked people to reduce petrol and diesel usage through public transport, car-pooling, work-from-home practices and increased adoption of electric vehicles.

Separately, Petroleum Minister Hardeep Singh Puri acknowledged concerns around how long oil companies can continue absorbing losses while shielding consumers from global price shocks.

"I think the time has come that we may need to stock up even more," Puri said, highlighting growing concerns around India’s strategic reserves and energy security.