India oil and gas - Peace deal finally? Potential winners and losers

Research evidence excerpt

India oil and gas - Peace deal finally? Potential winners and losers

Nomura | India oil and gas 15 June 2026

(Special Additional Excise Duty) on exports of oil products which directly benefits OMCs,

and a fall in oil prices (from the highs of April). We estimate integrated margins for IOCL

(Buy)/BPCL (Buy/HPCL (Neutral) at ~USD12-14/bbl at current prices (see Fig.4). The

SAED impact would be most significant for HPCL due to its higher proportion of retailing

volume vs refining throughput.

Excise duty cuts may be rolled back first before any fuel price relief

We believe the government’s reaction to potentially lower oil prices with respect to OMCs

and refiners will likely follow the order below:

1. Removal of SAED on petroleum product exports

2. Gradual unwinding of INR10/litre excise duty cuts

3. Fuel price cut if oil prices sustain at below USD65/bbl after OMCs recover the losses

of the past four months. We think that the fuel price cut may only be marginal

(INR2/litre, if at all) as earlier price hikes were only towards the compensation for INR’

s depreciation and higher crude oil price was anyway not passed on to end

consumers.

We believe standalone refiners will likely benefit immediately from the withdrawal of

SAED; however, we believe refining margins will likely also normalize lower once the

refiners in the Middle East resume operations and petroleum products exports from the

Middle East resume.

LPG under-recoveries may go down with lower Saudi CP and premiums

We expect Saudi contract prices for LPG to gradually trend lower starting July. Moreover,

with volumes resuming via SoH, logistics costs for sourcing LPG should go down for

OMCs, helping lower under-recoveries (which are currently above INR600/cylinder).

Fig. 2: Fuel marketing margins Fig.