Business · India Bureau
State oil firms bleed ₹530 crore daily as crude prices soar unchecked
India's state-run oil marketing companies are facing mounting daily losses as international crude prices surge while domestic fuel rates remain frozen. The three major OMCs are absorbing significant losses on every litre of petrol and diesel sold to consumers.
LSN India ·
State-owned oil marketing companies are hemorrhaging approximately ₹530 crore daily due to a widening gap between international crude prices and domestic fuel costs, according to ratings agency ICRA. Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd are each absorbing losses of ₹8 per litre on petrol sales and ₹9 per litre on diesel, while liquefied petroleum gas subsidies amount to roughly ₹300 per cylinder.
The mounting losses stem from a sharp appreciation in global crude prices, which have surged amid escalating geopolitical tensions and supply disruptions across West Asia. The basket of crude oil India imports climbed to USD 117.4 per barrel as of late September, a significant jump from the 2025-26 fiscal average of approximately USD 66 per barrel. Key drivers include renewed US-Iran hostilities, the shutdown of Saudi Arabia's East-West pipeline and heightened militant activities targeting shipping lanes in the Red Sea.
With domestic fuel prices held steady despite the international price movements, the gap between cost and retail price has widened substantially. This pricing disconnect has forced state-run OMCs to absorb the difference, straining their balance sheets as they continue meeting consumer demand at government-regulated prices.