New Delhi: India’s three state-run oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are collectively estimated to be suffering daily losses of nearly Rs 1,000 crore to Rs 1,200 crore as the government continues to keep petrol, diesel and LPG prices largely unchanged despite a sharp global energy price surge triggered by the ongoing West Asia conflict and disruptions in the Strait of Hormuz.
According to industry sources, the mounting under-recoveries could push the combined quarterly losses of the three oil marketing companies (OMCs) beyond Rs 90,000 crore during the first quarter of FY27 if the current fuel pricing status continues.
Petrol and diesel prices in India have not been revised upward since April 2022 despite repeated volatility in global crude oil markets. Domestic LPG cylinder prices were last increased in March this year, but only marginally compared to the steep escalation in international LPG rates.
Industry estimates suggest the OMCs are currently losing around Rs 14 per litre on petrol, Rs 42 per litre on diesel, and nearly Rs 674 on every 14.2-kg domestic LPG cylinder sold. The companies are also reportedly incurring losses on aviation turbine fuel (ATF) supplied for domestic air travel due to only partial pass-through of international price increases.
The financial burden is particularly significant given that the cumulative FY26 profit of the three companies is estimated at around Rs 76,000 crore — lower than the projected losses they could face within a single quarter under current pricing controls.
Sources said discussions within the government over a possible fuel price hike have intensified in recent days. At present, there is reportedly no plan to compensate the OMCs for losses on petrol, diesel and jet fuel sales below market prices, a signal many industry observers interpret as indicating that retail fuel price revisions may be under consideration.
However, government intervention to support losses on domestic LPG sales cannot be ruled out, especially given the political and social sensitivity of cooking fuel prices.
Global oil markets have come under severe pressure following disruptions in shipping movement through the Strait of Hormuz, a strategic maritime route that handles nearly one-fifth of the world’s oil and gas trade. Supply concerns arising from the Iran-linked conflict in West Asia have pushed international crude and fuel prices sharply higher.
India, heavily dependent on imported crude oil and natural gas, remains vulnerable to such global energy shocks, with domestic fuel economics closely tied to international benchmarks.
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