HPCL, BPCL, IOCL surge nearly 3%: Petrol, diesel rates hiked for second time in a week as Brent hovers near $110

The latest hike comes just days after fuel rates were revised for the first time in more than four years, bringing renewed attention to companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

According to a PTI report, petrol and diesel prices were raised again on Tuesday, marking the second increase within a week. In Delhi, petrol prices went up by 87 paise per litre to Rs 98.64, while diesel prices rose by 91 paise to Rs 91.58 per litre.

These revisions come at a time when global crude oil prices remain elevated because of geopolitical tension in West Asia.

Let’s take a look at what investors need to know about the latest development –

Fuel prices trending higher after years of stability

The latest increase follows a Rs 3 per litre hike announced last Friday. 

Before that, petrol and diesel prices had remained largely unchanged for more than four years despite fluctuations in global oil prices.

Global oil markets have remained volatile due to concerns over supply disruptions linked to the ongoing tension involving Iran, the United States and Gulf nations.

The Strait of Hormuz, through which a large share of the world’s crude oil supply passes, continues to remain at the centre of global market concerns. Any disruption in the region directly impacts crude prices and fuel costs for oil-importing countries like India.

Need additional fuel price hikes to offset impact for OMCs: IDFC First Bank

Earlier after the first Rs 3/litre hike, several experts had pointed out that this may not be sufficient to offset the impact and extent of losses for OMCs. Given Crude’s 40% surge between February 28 to now, they see room for additional hike in prices. 

According to IDFC First Bank, “Given the under-recoveries faced by OMCs, further increases in retail petrol and diesel prices are expected. We expect a cumulative rise of up to 10% in retail petrol and diesel prices (including today’s increase), spread over the next few months.”

Crude oil volatility keeps markets nervous

Even though fuel prices have been revised upward domestically, crude oil prices showed some cooling in early trade on Tuesday after US President Donald Trump reportedly paused a planned attack on Iran.

Brent crude futures for July delivery slipped more than 2% to around $109.58 per barrel, while US West Texas Intermediate crude also declined below the $108 mark.

However, oil prices still remain significantly higher compared to earlier levels seen this year. The sharp rise in crude over recent weeks has continued to pressure global markets, currencies and inflation expectations.

For India, higher crude prices remain a major concern because the country imports a large portion of its energy requirements. 

OMC stocks to stay active

Against this backdrop, investors are expected to closely monitor oil marketing companies during today’s session.

Stocks such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are likely to remain in focus as traders assess whether the latest fuel price hikes will help improve marketing margins.