BPCL, IOC Stocks Rise Up to 6% as Brent Crude Falls Below $98, Petrol and Diesel Prices Hike for Fourth Time

Oil Marketing Companies' Shares Surge Amid Crude Oil Price Drop

May 25, 2026 - The Indian stock market witnessed significant gains in shares of oil marketing companies (OMCs) today, as crude oil prices cooled to a two-week low. Hindustan Petroleum Corporation Limited (HPCL) led the charge with its shares rising 5.8% to ₹412.55 apiece. This was followed by Bharat Petroleum Corporation Limited (BPCL), whose stock added 4.44% to ₹308.70. Meanwhile, Indian Oil Corporation (IOC) jumped 3.90% to ₹144.95 on the BSE today.

With today's rise, OMC stocks have turned positive for May and are set to close in the green for the second month in a row. However, in 2026 so far, their shares are down 13-20%. The surge in OMC shares can be attributed to a decline in crude oil prices to below $98 per barrel earlier today amid hopes of an end to the West Asia crisis and the opening of the Strait of Hormuz, a critical chokepoint for 20% of global oil passage.

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Higher crude oil prices threaten to squeeze OMCs' refining and marketing margins and vice versa. Brent crude futures fell $5.85, or 5.7%, to $97.69 a barrel while US West Texas Intermediate were at $90.85 a barrel, down $5.75, or 6%. Both contracts touched their lowest since May 7 earlier in the session.

JM Financial, in a note on May 18, had said that OMCs could incur Q1FY27 under-recoveries of approximately ₹84,500 crore or ₹920 crore/day and a cash loss of ₹54,000 crore or ₹580 crore/day, which implies potential for ~10% erosion in OMCs' book value by end-Q1FY27E. However, it added that OMCs have balance sheet strength to absorb current quarterly under-recoveries for two–three quarters (current net debt-to-equity comfortable at ~0.52x versus 1.16x during the Russia crisis).

In a bid to ease the pressure on OMCs, the government has announced a fourth hike in petrol and diesel prices today. Diesel prices have increased by Rs. 2.71 per litre and petrol by Rs. 2.61 per litre, taking petrol in Delhi to ₹102.12. With the latest revision, cumulative increases in petrol and diesel prices amount to nearly ₹7.5 per litre since fuel rate revisions resumed on May 15 after a prolonged freeze.

JM Financial, after the first fuel hike of almost ₹3 earlier in May, had stated that OMCs need a fuel hike of ₹6–9/litre to avoid EBITDA loss and ₹14–17/ltr to earn normalised EBITDA.

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