BPCL, IOC Shares Drop Up to 7% Due to Budget Disappointment and Rising Oil Prices

Shares of state-owned oil companies like Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) saw a sharp decline of up to 7% in Monday’s intra-day trading. This fall is due to disappointment over the 2025-2026 Budget, which failed to provide the expected boost to the sector. 

Shares Hit 52-Week Lows

• BPCL share price dropped by 5%, reaching ₹242.30.
• IOC share price fell by 3%, hitting ₹120.10.
• Hindustan Petroleum Corporation (HPCL) share price saw the largest drop, falling 7% to ₹320.15.

These declines pushed the shares of all 3 companies to their 52-week lows. Meanwhile, the BSE Sensex was down 0.7% at 76,963.

Budget Impact on OMCs

For FY25, the government revised the LPG subsidy upward to ₹14,700 crore from ₹11,925 crore in the previous budget. For FY26, the LPG subsidy allocation is even lower at ₹12,100 crore, much less than expected, which could negatively impact the profitability of OMCs.

Oil Price Surge Adds to the Pressure

Oil prices also rose on Monday after the US imposed tariffs on Canada, Mexico, and China, raising concerns over crude supply disruptions.

• US West Texas Intermediate crude jumped 1.9%, reaching $73.89 per barrel.
• Brent crude rose 0.9% to $76.34 per barrel.

LPG Under-Recoveries and Other Challenges

LPG prices are controlled by the government, with retail pricing determined by the government’s decisions. OMCs face challenges in terms of LPG under-recoveries, especially during FY25, which impact their profitability. Other factors contributing to stock underperformance include a weakening rupee and limitations on discounted Russian crude imports.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.