Shares of India’s state-owned oil marketing companies (OMCs) fell sharply on Tuesday, with Hindustan Petroleum Corporation (HPCL) leading the decline at 5.4%, followed by Bharat Petroleum Corporation (BPCL) at 4.7% and Indian Oil Corporation (IOC).
The sell-off was driven by a sharp rebound in crude oil prices, which has intensified pressure on refining margins for the sector.
The sector had seen a brief reprieve earlier in the week when Brent crude dropped $1.
Investors booked profits after the stocks had recently benefited from a dip in crude costs, but the reversal in commodity prices quickly eroded that optimism.
The market move underscores the sensitivity of Indian refiners to global energy price volatility.
As crude prices surge, the cost of feedstock for these companies rises, directly impacting their gross refining margins (GRMs).
The sector had seen a brief reprieve earlier in the week when Brent crude dropped $1.47, or 1.95%, to $73.79 a barrel, and WTI fell to $70.48.