India Energy: Fuel Prices Hiked

Research evidence excerpt

India Energy: Fuel Prices Hiked

Idea

May 15, 2026 05:33 AM GMT

Morgan Stanley Asia (Singapore) Pte.+MIndia Energy | Asia Pacific Mayank Maheshwari

Equity Analyst

Fuel Prices Hiked Mayank.Maheshwari@morganstanley.comMorgan Stanley India Company Private Limited+ +65 6834-6719

Pranitha Shetty

India raised gasoline and diesel prices after increasing prices for ResearchPranitha.Shetty@morganstanley.comAssociate +91 22 6118-3022

CNG, cooking gas, jet fuel and other fuels over the past month. Hinal Choudhary

The Rs3/litre increase in gasoline and diesel covers a third of the Research Associate

Hinal.Choudhary@morganstanley.com +91 22 6118-2044

current transport fuel losses. Historically, there have been Morgan Stanley Asia (Singapore) Pte.+

phased price hikes daily or weekly. Vivek Rajamani

Vivek.Rajamani@morganstanley.com +65 6834-6740

Key Takeaways Ryan M Heng

Rs3/litre increase (~3% price hike; US$5/bbl) implies fuel price basket rising to US Research Associate

Ryan.Heng@morganstanley.com +65 6834-6465

$81/bbl Brent and reduces transport fuel loss to US$10/bbl for retailers.

India Oil & Gas

Past fuel price increases have been implemented by OMCs on a daily/weekly Asia Pacific

basis under the daily pricing mechanism, limiting the impact on consumption. Industry View In-Line

This first increase is much lower than the Rs5-10/litre anticipated by investors.

Cooking gas losses of US$1bn per month remain, though the government has

compensated such losses in the past, as cooking gas is a controlled product.

HPCL benefits the most, followed by BPCL. Reliance and ONGC also benefit.

More importantly, fuel price hikes help improve long-term profitability for OMCs.

What's priced in? At implied book values of 1x F28 P/B, fuel retailers are pricing in a