New Delhi: The Indian rupee plummeted to an all-time low of 88.34 against the US dollar on Monday, marking a significant currency depreciation that has immediate implications for the country’s oil and gas sector.

Upstream oil producers, including Oil and Natural Gas Corporation (ONGC) and Oil India, are expected to benefit from the weaker rupee. Their dollar-denominated earnings increase in value when converted to rupees, potentially boosting profits in the near term.

In contrast, downstream companies such as Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation (IOC), and Petronet LNG face higher import costs for crude oil and liquefied natural gas (LNG). The increase in expenses may pressure margins and force higher fuel prices for consumers.

The Nifty Oil & Gas index has shown volatility in response to the currency movement, reflecting investor caution. BPCL, which reported a net profit of ₹6,124 crore and a gross refining margin of 4.88 per barrel in the first quarter of FY26, has performed strongly, but continued rupee weakness could threaten sustained profitability across the sector.

Analysts warn that the rupee’s decline also reflects broader economic challenges, including a widening trade deficit and reduced foreign portfolio inflows. The Reserve Bank of India (RBI) may intervene, but currency stabilization is likely to depend on broader global trade conditions.

The rupee’s record low presents a complex scenario for the oil and gas sector, with upstream producers benefiting from currency gains, while downstream players face rising costs and potential pressure on margins. The industry’s outlook will depend on global market trends, exchange rate stability, and strategic policy measures.