BPCL, HPCL, IOC Stocks Rally Despite Rs 18/Litre Loss On Petrol, Rs 35 On Diesel; What Is Fuel Prices Freeze?

Oil marketing companies' (OMC) share prices rally on April 15 despite the mega brunt of the West Asia war. Shares of Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Ltd. (BPCL) and Indian Oil Corporation Limited (IOCL) climbed 3% to 5% on April 15 even after reports of fuel price freezes.

OMCs have been the most vulnerable to the US-Israel-Iran war and now they are reported to bear an Rs 18 per litre loss on petrol and an Rs 35 per litre loss on diesel fuels. Then why are the stock prices rallying on April 15?

OMC Shares On April 15:

At the time of writing, HPCL share price surged by nearly 5% to trade above Rs 366 apiece, while IOCL stock gained nearly 3% to trade above Rs 145 apiece. BPCL stock rallied by 4.4% to trade between Rs 305 to Rs 306.

The major reason OMC shares are up is the latest decline in crude oil prices to $90 per barrel. The further crude oil prices fall, the better the conditions will be for OMCs who are bearing fuel losses.

Petrol, Diesel Losses:

As per reports, OMCs have kept pump prices frozen despite sharp surge in input costs since US-Israel attacked Iran on February 28, 2026.

Industry sources revealed that the three OMCs-namely HPCL, BPCL and IOCL-were incurring losses up to Rs 2,400 crore per day at the peak last month. However, the losses have reduced to Rs 1,600 crore per day after the government lowered excise duties by Rs 10 each on petrol and diesel.

According to a report of Macquarie Group, at crude prices of $135 to $165 per barrel, Indian OMCs would bear losses of Rs 18 per litre on petrol and Rs 35 per litre on diesel sales. The broker estimated that for every $10 per barrel surge in crude oil prices, OMCs bear Rs 6 per litre in market losses.

Despite this, OMCs have kept petrol and diesel prices frozen.

What Does Fuel Prices Freezing Mean?

In simple words, a price freeze means the government prohibits companies from increasing prices of goods and services despite uncertain conditions. This method is believed to protect consumers from sudden cost hikes and crises and to stabilize the economy.

Hence, when fuel prices are frozen, OMCs do not revise petrol and diesel prices, bearing the loss from the crisis and input costs, which will impact their margins and profitability.

Notably, Indian OMCs have kept petrol and diesel prices unchanged since April 2022. From 2022 to date, the global economy has seen significant shifts from the Russia-Ukraine war and the Israel-Gaza-Hezbollah-Iran war to tariff hikes to trade wars and much more. Global crude oil prices have swung accordingly.

Oil prices hit near $150 per barrel following the Russia-Ukraine war but cooled to $70 per barrel last year before spiking to $120 per barrel last month. Throughout this, OMCs have not changed fuel prices.

Also, despite the latest excise duty cut of Rs 11.9 per litre on petrol and Rs 7.8 per litre on diesel, which does cushion OMCs' losses. There are still state-level value-added taxes (VATs), which are largely high and vary from state to state.

Fuel prices are calculated taking into consideration international crude prices, excise duty, VAT, cess, currency fluctuations and other costs.

West Asia War To Impact OMCs Severely?

Economists at CareEdge Ratings believe OMCs would be able to absorb an increase in Brent crude prices up to $100-105 per barrel.

According to the economists, while the government and oil marketing companies (OMCs) have absorbed much of the impact of the energy shock
following the West Asia crisis, shielding the retail prices, the situation remains volatile. Energy prices have risen sharply amid the breakdown of diplomatic talks and uncertainties surrounding the Strait of Hormuz.

Giving Q4FY26 outlook for OMCs, analysts at Kotak Institutional Equities said, "Driven by stronger crude, weaker currency, and higher LPG under-recoveries, we expect OMCs to report weak numbers. With elevated product cracks, refining GRM will look elevated, but marketing will be weak. For BPCL, we expect EBITDA to decline 28% qoq (down 3.2% yoy). For HPCL, we expect EBITDA to decline 51% qoq (down 52% yoy). For IOC, we expect EBITDA to decline 22% qoq (up 5.6% yoy)."

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