Petrol, diesel price hike drags HPCL, BPCL, IOCL shares down up to 3%; HPCL warns of Q1 losses

OMC Share Price Today: Shares of state-run oil marketing companies (OMCs) including Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOCL) fell up to 3 per cent on Friday, May 15, after retail petrol and diesel prices were increased for the first time in four years.

In Delhi, petrol and diesel prices were hiked by Rs 3 per litre each. Petrol was revised to Rs 97.77 per litre from Rs 94.77, while diesel rose to Rs 90.67 per litre from Rs 87.67. Fuel prices continue to vary across states depending on local VAT rates.

CNG prices in the capital were also increased by Rs 2 per kg to Rs 79.09 per kg, adding further pressure on transport costs.

Break-even gap remains wide

Industry estimates suggest OMCs would need a sharper increase—nearly Rs 10 per litre for petrol and Rs 15 per litre for diesel—to fully break even at current crude oil price levels, highlighting continued margin stress for the sector.

HPCL flags weak Q1 outlook

During its earnings call, HPCL management said the June quarter is expected to remain challenging for the sector, with the company likely to report losses in Q1 amid elevated crude prices and ongoing geopolitical uncertainty.

The company said its balance sheet remains strong enough to navigate the volatile environment, but acknowledged continued pressure on refining and marketing margins.

HPCL also reiterated that commissioning of the Rajasthan Refinery (HRRL) remains a key priority, after which the company will shift greater focus toward petrochemicals. Renewables will also continue to be an increasing part of its long-term strategy.

Crude sourcing shifts amid global tensions

HPCL said it currently holds around two months of secured crude inventory at any point and remains adequately supplied through July.

While crude procurement is typically split between term contracts and spot purchases, the company said it has increased reliance on spot sourcing following escalation of tensions in West Asia. It also noted a shift in sourcing patterns, with reduced dependence on Persian Gulf crude and higher imports from Russia.

LPG losses and government support

On LPG operations, HPCL reported under-recoveries of Rs 1,350 crore for the quarter, while receiving Rs 3,300 crore in government compensation towards LPG subsidies.

The company said it continues to manage losses efficiently but refrained from offering forward guidance due to volatile crude price conditions.

Analyst sentiment turns cautious

Investor sentiment on HPCL has weakened, with nearly one-third of the 34 analysts tracking the stock now recommending a ‘Sell’ rating—the highest level in two years and the first such instance since March 2024.

The downgrade trend has been reinforced by Nomura, which cut HPCL to ‘Neutral’ from ‘Buy’ and lowered its target price to Rs 440 from Rs 550. Other brokerages including CLSA, ICICI Securities and Equirus Securities have also revised their outlook downward in recent weeks.