HPCL, BPCL And IOC Rally As Crude Prices Ease, Fuel Rate Hike Supports Sentiment

Shares of state-run oil marketing companies (OMCs) rose up to 6% on May 25 after global crude oil prices declined to a two-week low and fuel prices were increased again in the domestic market.

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Hindustan Petroleum Corporation Limited (HPCL) led the gains among oil PSUs, rising 5.8% to ₹412.55 on the BSE. Bharat Petroleum Corporation Limited (BPCL) advanced 4.44% to ₹308.70, while Indian Oil Corporation (IOC) climbed 3.9% to ₹144.95 during the session.

The rise in OMC stocks followed a sharp fall in international crude prices amid expectations of easing tensions in West Asia and possible reopening of the Strait of Hormuz, a major route for global crude shipments.

Brent crude futures dropped $5.85, or 5.7%, to $97.69 per barrel, while U.S. West Texas Intermediate crude declined 6% to $90.85 per barrel. Both benchmarks touched their lowest levels since May 7.

Fuel Price Hike Lifts Sentiment

Market sentiment also improved after retail fuel prices were increased for the fourth time since May 15.

Petrol prices were raised by ₹2.61 per litre, while diesel prices increased by ₹2.71 per litre. Following the latest revision, petrol prices in Delhi moved up to ₹102.12 per litre.

The latest increase has taken the cumulative rise in petrol and diesel prices to nearly ₹7.5 per litre since fuel price revisions resumed earlier this month after a prolonged pause.

Higher retail fuel prices are expected to reduce pressure on the marketing margins of oil retailers at a time when global crude oil prices remain elevated compared to earlier levels this year.

Oil Prices Remain In Focus

OMC stocks had witnessed pressure in recent months after crude prices surged following the escalation of conflict in West Asia. Rising oil prices typically increase input costs for fuel retailers and affect profitability if retail price adjustments remain delayed.

The country relies heavily on imported crude oil needs, and thus domestic oil companies have to be conscious about the dynamics of the crude oil market in the international market.

While the market has seen some recovery, stocks of oil marketing companies have continued to be 13-20% lower this year as compared to 2026 so far. The latest bounce back, however, has resulted in the positive side of the balance sheet for the month of May, leading the way for gains for two consecutive months.

It is likely that investors will keep an eye on crude oil dynamics as well as developments in West Asia.