Indian Oil stock tumbles as tariff jitters and budget tax risk weigh on oil retailers

NEW DELHI, Jan 8, 2026, 17:58 IST

• Indian Oil shares fell nearly 4% and hit an intraday low of 155.80 rupees
• Indian benchmarks logged their sharpest one-day fall in over four months; oil and gas led sector losses
• JM Financial flagged a Budget excise-duty risk for state-run fuel retailers, including Indian Oil

Indian Oil Corp shares slid on Thursday, extending a four-session decline, as the state-run fuel retailer tracked a broader sell-off in Indian equities. The stock touched an intraday low of 155.80 rupees and was last down 3.87% at 156.37 rupees.

The drop landed as investors pulled back from risk assets, with Indian benchmarks posting their steepest one-day fall in over four months. Oil and gas shares were among the hardest hit sectors as traders weighed global policy risks and crude-market headlines.

“The markets are not comfortable with the uncertainty over tariffs,” said Anita Gandhi, head of institutional business at Arihant Capital Markets. Reuters reported U.S. President Donald Trump is considering tariffs of up to 500% on countries buying Russian oil and has warned India of higher duties, keeping foreign investors wary. https://www.reuters.com/world/india/india-…

Closer to home, budget risk is back on the tape for fuel retailers. JM Financial cautioned that the government could use the upcoming Union Budget to raise excise duty on petrol and diesel, a move that can squeeze marketing profits if pump prices do not move in step.

“OMCs’ blended auto-fuel GMM of ~INR 8.2/ltr (vs. historical GMM of INR 3.5/ltr) implies INR 3-4/ltr scope for a hike in excise duty,” the brokerage wrote. GMM, or gross marketing margin, is the per-litre margin fuel retailers make on auto fuels before costs; “diesel cracks” refers to diesel’s pricing premium over crude, a proxy for refining profitability.

MarketsMojo said Indian Oil’s fall pushed it below short-term moving averages — price trend lines watched by many traders — after four straight down sessions. It put the four-day drop at 5.52% and said the stock was down 5.47% year-to-date, underperforming the Sensex over that period.

Indian Oil’s peers, including Bharat Petroleum and Hindustan Petroleum, have also been sensitive to the same mix of policy risk and crude moves, with investors toggling between “low oil helps margins” and “higher taxes take it back.” A Livemint analysis this week also pointed to swings across Indian oil names as traders priced in the possibility of abrupt crude supply shocks and policy spillovers. https://www.livemint.com/market/mark-to-ma…

The near-term read is messy. If crude stays subdued and the budget avoids a fresh excise hike, marketing margins could hold up and beaten-down oil retailers may stabilise. But a sharper crude rebound, or a tax move that caps retail pricing power, can flip that margin story quickly — and the stocks tend to move before the numbers do.