IOC, HPCL, BPCL slip due to margin pressure in rising crude oil prices; Yes

Oil marketing companies (OMCs) such as Indian Oil Corporation Limited (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) were under pressure on Wednesday, with stocks falling as much as 7 per cent.

According to Varun Dubey, senior research analyst at G Business, OMCs are losing between Rs 9-10 per liter on petrol and Rs 25-30 per liter on diesel. OMCs are suffering as crude oil prices rise amid the ongoing Russia-Ukraine crisis.

The increase in global fuel prices between March 22 and April 6, 2022 was about Rs 10 per liter for petrol and diesel, the senior research analyst added, adding that these increases were offset by compensation, excise and VAT. Central and state governments in November last year.

Despite the high price of crude oil, the price has not been revised since April 6, 2022, which is widely volatile and fluctuates around $ 112- $ 115 per barrel. Dubey speculated that if these companies fail to raise prices further, their health is likely to worsen.

Personally, HPCL stocks fell the most as share prices fell nearly 7 percent. HPCL touched a new 52-week low of Rs 238.8 per share on the BSE Intraday. However, IOC shares fell more than 4 per cent to Rs 119 per share on multiple triggers, including lower-than-expected Q4 results.

Similarly, shares of BPCL were also weak during Wednesday’s session, down nearly 2 per cent to Rs 336.5 per share, near the 52-week low. The government may take more time to sell its stake in BPCL as they consider revising its terms of sale, PTI reported last month.

Reuters reports that crude oil prices rose more than 5 115 a barrel on Tuesday, their highest in nearly seven weeks, as the European Union pushed for a ban on Russian oil imports that would tighten supplies.

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