Government oil marketing companies (OMCs) are still in losses ₹Even after increasing the rates of petrol and diesel, Rs 750 crore is lost per day on the sale of auto fuel and cooking gas. ₹A government official on Friday did not comment on further increase in fuel rates by Rs 3 per litre.
“Losses at OMCs are still there and may still happen ₹Rs 750 crore per day. And this includes petrol, diesel and LPG [liquefied petroleum gas] “Everything has been put together,” Sujata Sharma, joint secretary in the petroleum ministry, said at an inter-ministerial briefing on the impact of the West Asian crisis on India on Monday.
A few days ago, oil companies had increased the prices of petrol and diesel. ₹On May 15, Petroleum Minister Hardeep Singh Puri had said that OMCs were incurring a daily loss of Rs 1,000 crore on the sale of three fuels.
The loss is due to the rise in the price of crude oil – a 51% increase between February 28, when the US-Israeli attack on Iran began, and Monday – but it is exacerbated by the depreciation of the rupee, which has fallen X% against the dollar since the beginning of the year. India imports 88% of its crude oil needs.
This could mean another hike in retail fuel rates, as also suggested in the latest research report from the State Bank of India, which said Friday’s price hike will offset only 15% of OMCs’ total losses in 2026-27.
A second hike in fuel prices is imminent if global oil prices remain high due to the ongoing conflict in West Asia and the key sea route for energy shipments through the Strait of Hormuz remains a challenge, sector experts and industry executives said. Sharma on Monday acknowledged that even two and a half months after the Middle East crisis, the situation in the strait is “not normal”, leading to rising prices of crude oil, natural gas and liquefied petroleum gas (LPG or cooking gas).
But she said she could not “predict” whether there would be another increase in retail fuel prices.
However, Sharma said there is no shortage in the supply of crude oil or refined products. He said that irrespective of any sanction on the purchase of Russian crude – which, he said, has always met its energy requirements on commercial principles – India’s energy supply is secure.