10 May,2026 05:47 PM IST | New Delhi | mid-day online correspondent
Behind stable petrol prices lies a growing financial firestorm. Representational Pic
India's state-owned oil companies (OMCs) are facing growing financial pressure after absorbing massive losses to shield consumers from the impact of soaring global energy prices triggered by the ongoing Middle East tensions, reported the PTI.
For the last 10 weeks, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have continued selling petrol, diesel and cooking gas LPG at rates significantly below actual costs, despite a steep rise in crude oil prices, the news agency reported.
According to PTI, the combined under-recovery of the three companies currently stands at around Rs 1,600 crore to Rs 1,700 crore every day. The cumulative losses have now crossed Rs 1 lakh crore.
Even after a nearly 50 per cent increase in crude oil prices globally, petrol and diesel prices in India have largely remained unchanged for almost two years. Petrol is currently priced at Rs 94.77 per litre, while diesel costs Rs 87.67 per litre, as per the PTI.
Cooking gas LPG prices were revised upward by Rs 60 per cylinder in March, but officials said domestic LPG continues to be sold below cost, reported the news agency.
The decision to maintain stable fuel prices has helped consumers avoid the sharp hikes seen in several countries, including Japan and the United Kingdom, where fuel rates reportedly increased by up to 30 per cent after the West Asia conflict escalated.
Officials said the continued losses are now affecting the financial stability of the OMCs, forcing them to consider additional borrowing to meet working capital needs.
"If elevated crude prices persist for an extended period, OMCs may require higher working capital borrowings and calibrated re-prioritisation of some capex timelines," a source said, as per the news agency.
Another source warned that sustained financial pressure could impact long-term infrastructure and energy transition projects.
"Financially strong OMCs are critical for India's energy security, supply continuity, infrastructure expansion, and economic stability," the source said.
The central government has also absorbed part of the burden by reducing excise duties on petrol and diesel. The special additional excise duty on petrol was reduced from Rs 13 per litre to Rs 3, while diesel excise duty was cut from Rs 10 per litre to zero, as per PTI reports.
Sources said the tax reductions are costing the government around Rs 14,000 crore every month in lost revenue.
With losses widening steadily, officials indicated that a fuel price revision may eventually become unavoidable.
"There is no doubt that a fuel price hike has become inevitable, but the timing and quantum of increase have to be decided by the government," a source said.
The ongoing crisis has highlighted the delicate balance between protecting consumers from inflation and maintaining the financial health of companies responsible for ensuring India's energy security.
(With PTI Inputs)
