Shares of India’s oil marketing companies — Indian Oil, HPCL and BPCL — surged up to 3.5% today after an increase in premium petrol prices. There was no change in “normal” petrol prices.
The prices of premium petrol — BPCL’s Speed, HPCL’s Power, and IOCL’s XP95 — has been increased by ₹2.09– ₹2.35 per litre, according to ANI post on X. There is no change in the price of regular petrol at present.
The state-run Indian Oil Corp. Ltd., Bharat Petroleum Corp. Ltd., and Hindustan Petroleum Corp. Ltd. have been absorbing the cost of a surge in crude oil prices due to Iran war. Every $10 rise in crude oil prices erodes erodes their margins by ₹6.3/litre of petrol and diesel they sell, according to Elara Securities.
To be sure, fuel prices have surged globally.
- In the US, gasoline now costs 20% higher than before the Iran war.
- China has effected the biggest fuel price hike since 2022.
- In the UK, fuel prices are at an 18-month high.
- Fuel prices in Pakistan and Sri Lanka are up by 20% and 8%.
To be sure, the government cannot avoid a petrol/diesel price hike indefinitely. It does have a buffer in terms of excise duty— ₹19.9 per litre of petrol and ₹15.8 per litre of diesel. According to experts, retail petrol/diesel prices can be fully protected through excise duty cuts of up to $110 per barrel.
For now, the government has not announced any plans to cut excise duty, and Indian Oil, BPCL and HPCL are footing the bill. The premium petrol price hike today will offset the impact, but only so much.
