India’s state-run oil marketing companies (OMCs) are finding no refuge in the first retail fuel price hike since 2022. Despite raising petrol and diesel prices by up to Rs 3 per litre on Friday, shares of HPCL and BPCL tumbled 3% as investors realised the adjustment won’t be enough to handle the ocean of mounting losses. With Brent crude hovering well above the $100 mark and the West Asia crisis showing no signs of cooling, the market is bracing for a quarter of potentially catastrophic financial bleeding.
"The modest hike in retail price of Rs 3/litre for petrol and diesel provides limited relief to the oil marketing companies," said Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings at ICRA. "ICRA estimates that at a crude price of $105-110 per barrel, oil marketing companies incur a loss of about Rs 500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike."
