Fuel Price Hikes Reduce Daily Losses of State-Owned Oil Firms from ₹1,000 Crore to ₹600 Crore

Losses borne by state-owned oil marketing companies on the sale of petrol, diesel and domestic LPG have fallen to below ₹600 crore per day following recent fuel price revisions, as per news reports. 

According to the Ministry of Petroleum and Natural Gas, 4 rounds of petrol and diesel price hikes since May 15, amounting to about ₹7.5 per litre, have helped reduce the financial burden on public sector fuel retailers. 

Before the revision cycle began, daily losses on the sale of these fuels were estimated at around ₹1,000 crore. 

Crude Oil Surge Added Pressure 

The losses widened after global crude oil prices moved sharply higher amid tensions involving Iran. Government officials indicated that crude oil prices had risen by more than 50% during the period. 

Despite the rise in input costs, state-owned oil companies had continued to keep petrol and diesel prices unchanged for some time. This resulted in a gap between the cost of procuring fuel and the prices charged at retail outlets. 

As a result, oil marketing companies accumulated significant under-recoveries on fuel sales. 

Petrol and Diesel Prices Adjusted 

Petrol and diesel are deregulated fuels, with retail prices generally linked to market conditions. The recent revisions were aimed at narrowing the difference between international oil prices and domestic fuel rates. 

Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, noted that daily losses have now fallen to slightly below ₹600 crore. 

The reduction shows the impact of the price revisions introduced over the past few weeks. 

LPG Continues to Contribute to Under-Recoveries 

The reported losses also include those arising from the sale of domestic LPG cylinders. Unlike petrol and diesel, LPG supplied to households remains a subsidised product. 

Oil companies sell domestic LPG at rates set under the subsidy framework, while the government compensates them for the difference between the actual cost and the retail selling price. 

Read More: India Rice Exports Dip In Early 2026 As West Asia Conflict Disrupts Basmati Shipments! 

Conclusion 

Recent increases in petrol and diesel prices have eased the financial pressure on public sector oil retailers. Even so, under-recoveries on household LPG continue to affect their overall earnings. 

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