Will petrol, diesel become more expensive? Here is what BPCL says
State-owned oil marketing company Bharat Petroleum Corporation Ltd may hike fuel prices after sub-par first-quarter earnings
Disappointing first-quarter earnings for BPCL and HPCL, coupled with rising crude oil prices due to geopolitical tensions and supply chain disruptions, are creating pressure for fuel price hikes in India. The companies are facing financial strain from elevated global oil costs, which hover around $93 per barrel, and increased shipping charges, leading to potential upward revisions in retail fuel prices.
Disappointing first-quarter earnings for BPCL and HPCL, coupled with rising crude oil prices due to geopolitical tensions and supply chain disruptions, are creating pressure for fuel price hikes in India. The companies are facing financial strain from elevated global oil costs, which hover around $93 per barrel, and increased shipping charges, leading to potential upward revisions in retail fuel prices.
Disappointing first-quarter earnings for BPCL and HPCL, coupled with rising crude oil prices due to geopolitical tensions and supply chain disruptions, are creating pressure for fuel price hikes in India. The companies are facing financial strain from elevated global oil costs, which hover around $93 per barrel, and increased shipping charges, leading to potential upward revisions in retail fuel prices.
The disappointing first-quarter earnings of Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) might snowball into fuel hikes in the near-term, according to market buzz.
HPCL posted a consolidated loss of ₹12,265 crore in the first quarter of FY2026 compared to a profit of ₹4,111 crore in the same quarter last year. BPCL also suffered a Q1 loss of ₹1,873 crore, turning away from last year’s ₹6,839 crore profit.
Following the results announcement, BPCL indicated it might need to increase retail fuel prices, citing that rising crude prices were straining its financials.
“Fuel prices require revision based on current crude prices. For now, we will wait to see whether crude stabilises at this level or comes down. The current surge appears temporary, but if prices remain elevated or rise further, there will definitely be an upward revision,” BPCL Director (Finance), Vetsa Ramakrishna Gupta, told Business Standard.
The statement comes as crude prices propped back up after recent West Asia developments, hovering around $93 per barrel. This is a sharp increase from $72 per barrel at the beginning of July. The sudden spike in prices is driven by supply concerns from disruptions in major oil transit routes, the Strait of Hormuz and the Red Sea.
As India imports around 50 per cent of its crude requirements through the Strait of Hormuz, domestic retail prices for fuel are largely dependent on the conditions of the global market.
Along with supply constraints, transportation charges have also increased. US President Donald Trump imposed a 20 per cent shipping tariff on countries using the Strait of Hormuz, as reimbursement for security provided by the US. Based on the current price of $93 per barrel of crude, these taxes add an extra cost of around $37 million per supertanker that crosses the waterway.
Generally, state-owned oil marketing companies are instructed to absorb these costs and lower their marketing margins for a period of time. But if crude prices remain high for a prolonged period of time, this method could become financially unsustainable for these companies, as in the case of BPCL.