The shares of state-owned Oil Marketing Companies (OMCs), including Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL), and Indian Oil Corporation Ltd. (IOC), declined by up to 5 per cent on Saturday, February 1, following announcements in the Budget documents concerning LPG subsidies.
Budget documents indicated that the LPG subsidy for the financial year 2025 was allocated at ₹14,700 crore, but this amount was decreased to ₹12,100 crore for 2026.
OMC stocks performance
In the first nine months of 2025, Oil Marketing Companies (OMCs) faced LPG under-recoveries totaling ₹30,000 crore. Among them, Indian Oil reported under-recoveries of ₹14,325 crore, BPCL recorded ₹7,200 crore, and HPCL, whose shares have declined by 5 per cent, reported ₹7,600 crore in under-recoveries.
Additionally, the budget document did not include any compensation for OMCs to offset LPG losses.
In April 2020, the petroleum ministry informed oil companies that if the market-determined price of an LPG cylinder fell below the effective cost to consumers, OMCs should set aside the difference in a buffer account for future adjustments.
IOC reported under-recoveries of ₹14,325 crore, while Bharat Petroleum Corporation Limited (BPCL) faced losses of ₹7,200 crore. Hindustan Petroleum Corporation Limited (HPCL) also experienced under-recoveries amounting to ₹7,600 crore, with its shares declining by 5 per cent.
The recent budget document did not provide any compensation for the Oil Marketing Companies (OMCs) to offset their losses from LPG sales. In April 2020, the petroleum ministry informed oil companies that if the market price of an LPG cylinder falls below the actual cost to consumers, the OMCs would keep the difference in a separate buffer account for future adjustments.
As of now, shares of IOC are down 2.2 per cent at ₹125.7, BPCL shares have decreased by 3.2 per cent to ₹252.75, and HPCL shares are trading 4.5 per cent lower at ₹342.15.
