NEW DELHI, MAY 10 (PTI): State-owned oil marketing companies (OMCs) have absorbed losses exceeding Rs 1 lakh crore over the last 10 weeks while shielding Indian consumers from the global energy shock triggered by the ongoing West Asia conflict, raising serious concerns over the sustainability of the current pricing system.
Sources said Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are together incurring under-recoveries of around Rs 1,600 crore to Rs 1,700 crore every day on the sale of petrol, diesel and domestic cooking gas LPG.
Despite nearly a 50% increase in international crude oil prices since the conflict began, retail fuel prices in India have remained largely unchanged, with petrol selling at around Rs 94.77 per litre and diesel at Rs 87.67 per litre. LPG prices, although raised by Rs 60 per cylinder in March, also continue to remain below actual market cost.
Sources said the OMCs have ensured uninterrupted fuel supply across the country even as global markets witnessed disruptions, rationing and steep price increases in several nations.
However, the continuing losses are now putting significant pressure on the finances of the public sector oil firms, forcing them to consider additional borrowing to meet working capital requirements and continue crude oil imports.
Officials warned that prolonged financial stress could eventually affect investments in refining capacity, pipeline networks, strategic petroleum reserves, clean fuel projects, ethanol blending and other energy transition initiatives considered vital for India’s long-term energy security.
A source indicated that if elevated crude prices persist for a prolonged period, the government may eventually have to take a political decision on revising petrol and diesel prices.
While countries such as Japan and the United Kingdom reportedly raised fuel prices by up to 30% during the crisis, India has continued with nearly two-year-old retail prices despite disruptions in imports of crude oil, LPG and natural gas.
The Centre has also attempted to cushion consumers by sharply reducing excise duties on fuel. The special additional excise duty on petrol was cut from Rs 13 to Rs 3 per litre, while excise duty on diesel was reduced from Rs 10 to zero.
Sources said the excise duty reductions alone have cost the government nearly Rs 14,000 crore every month in lost revenue.
Monday, May 11, 2026