Shares of oil marketing companies (OMCs) such as Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) surrendered early gains and slipped into negative territory during Friday’s trade, as investors reacted to the government’s latest excise duty revisions and ongoing volatility in global crude prices.
Stocks swung sharply, with gains of up to 5 per cent before slipping into losses.
Excise duty cuts on petrol and diesel aim to shield consumers despite a surge in crude prices.
ICRA flagged potential losses of ₹11–₹14 per liter if crude hits $100–105 per barrel.
BPCL shares were trading at ₹282.10 on the NSE at 10.11 am after surging 5 per cent in the session to ₹298.50, up from the previous close of ₹284.55.
Similarly, HPCL rose 4 per cent in early trade to ₹357.70 before easing to ₹342.40 at the time of writing. IOC climbed nearly 3 per cent to ₹144.37 but later declined 2 per cent to ₹137.59 by 10.13 am.
The initial rally in OMC stocks followed the government’s decision to slash excise duty on petrol. to ₹3 a liter and reduce the levy on diesel to nil, a move aimed at shielding consumers from surging fuel costs. The adjustment comes amid a sharp rise in global crude prices, which have jumped nearly 50 per cent since the United States and Israel launched military strikes against Iran on February 28, escalating tensions in the Middle East.
In a notification issued late on March 26, the Finance Ministry reduced excise duty on petrol from ₹13 per liter to ₹3 per litre, while diesel duty was cut from ₹10 per liter to zero, with immediate effect. The government indicated that the move would help offset under-recoveries faced by OMCs, even as retail fuel prices remain unchanged.
Finance Minister Nirmala Sitharaman said the duty cuts were intended to cushion consumers from rising energy costs triggered by the West Asia crisis. She noted that the reduction of ₹10 per liter each on petrol and diesel for domestic consumption reflects the government’s effort to manage supply shocks and price volatility.
Rating agency ICRA, in a note on Thursday, stated that if average crude oil prices rise to $100–105 per barrel, fuel retailers could face losses of ₹11 per liter on petrol and ₹14 per liter on diesel. It also indicated that the government may consider cutting excise duty on petrol and diesel to keep retail prices steady, thereby giving oil marketing companies additional room to offset refining-related losses.
Despite the supportive policy measures, market participants remained cautious, as concerns persist over margin pressures and the broader impact of sustained high crude prices on OMC profitability.
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Published on March 27, 2026