Shares of oil marketing companies and paint manufacturers declined up to 3 per cent in early trade on Friday after petrol and diesel prices were increased by ₹3 per litre across the country.
The fuel price hike, the first in more than four years, amid mounting losses suffered by fuel retailers due to elevated global crude oil prices.
On the BSE, shares of Bharat Petroleum Corporation Ltd declined 2.71 per cent, Hindustan Petroleum Corporation Ltd dipped 2.39 per cent, Indian Oil Corporation fell 1.85 per cent.
The stock of paint manufacturers, which use crude-linked derivatives as key raw materials, also traded lower. Indigo Paints declined 1.36 per cent, Asian Paints slipped 0.42 per cent, and Berger Paints India fell 0.14 per cent.
Analysts said the modest increase in retail fuel prices failed to fully offset concerns around elevated crude costs and put pressure on market margins.
Brent crude, the global oil benchmark, rose 1.23 per cent to $107.02 per barrel.
"The sharp increase in petrol, diesel, and CNG prices reflects the direct impact of the escalating West Asia energy crisis and supply disruptions around the Strait of Hormuz," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.
With global crude oil prices surging from nearly $69 in February to above $120 per barrel and currently at $107 mark, oil marketing companies were under mounting pressure due to rising input costs and shrinking marketing margins, he added.
Energy prices globally shot up after the US-Israel attack on Iran on February 28, and the subsequent retaliation by Tehran effectively shut down the Strait of Hormuz - the sea lane through which a fifth of the world's oil and gas transits.
Crude oil, the input raw material for making petrol and diesel, surged above $120 per barrel during the peak of the West Asia conflict, as opposed to the $70-72 range before the conflict.
Though prices have moderated in recent weeks, they continue to remain elevated around $104-110 per barrel range, keeping pressure on state-owned fuel retailers.
Earlier this week, Oil Minister Hardeep Singh Puri said the three fuel retailers were losing about ₹1,000 crore per day, and the cumulative losses in a quarter were enough to wipe away all the profit they made in a full year. He had put the losses at about Rs 1 lakh crore.
To cushion consumers from rising global prices, the government, on March 27, reduced excise duty on petrol and diesel by ₹10 per litre each.
Industry sources said the price hike appears calibrated - enough to partially ease margin pressure on oil companies without creating major inflationary shock.
The increase, however, will have some impact on inflation, they said.
Published on May 15, 2026