September 24, 2025 — Brent crude oil is trading close to $67.8 a barrel, offering some relief to India’s oil marketing companies (OMCs) such as BPCL, HPCL, and IOC. Fuel retailers had been under pressure due to high input costs and a weak rupee. Stable crude prices are helping their margins from slipping further, though the support is only limited.
In recent weeks, global crude markets were swinging due to changing demand forecasts, OPEC+ supply signals, and U.S. inventory data. Now prices seem to have found a stable range. Brent futures inched up slightly after U.S. crude stockpiles fell, as reported by the Energy Information Administration (EIA).
For Indian OMCs, this stability is welcome. Whenever crude prices rise sharply, their purchase costs jump, but fuel prices in India cannot always be raised due to regulations and political factors. This squeezes their marketing margins—the difference between selling price and cost. Analysts estimate that every $1 fall in crude boosts OMC margins by about ₹0.55 per litre of petrol or diesel.
However, a weak rupee continues to hurt. Since crude imports are priced in U.S. dollars, any fall in the rupee increases costs. Reports suggest that a 1% fall in the rupee can reduce margins by ₹0.50 per litre, creating a significant earnings impact across OMCs.
OMC stocks have been reacting sharply to crude moves. When prices rose above $75, their shares fell as investors feared margin pressure. Recently, as crude slipped below $70, these stocks recovered on expectations of better earnings.
Still, risks remain. Rising global demand, geopolitical tensions, or supply disruptions could push oil prices up again. Experts say that while refining margins are strong, the bigger challenge is on the marketing side where passing on costs to consumers is not easy.
For now, crude steady at $67.8 is giving OMCs a short break. It doesn’t solve all cost worries but prevents further pain. Going ahead, their profits will depend on how well they manage inventory, refine operations, and handle currency risks.
