India's State Oil Marketing Companies Now Losing ₹6/Litre on Petrol and ₹30/Litre on Diesel After Price Hikes

State-run oil marketing companies (OMCs) are now losing around ₹6 per litre on petrol and ₹30 per litre on diesel after fuel prices were raised by nearly ₹7.5 per litre over the past month, according to news reports.  

The underrecovery was much higher at the beginning of April, when it stood at ₹24 per litre for petrol and ₹105 per litre for diesel. 

LPG Sales Continue Below Cost 

Domestic LPG remains the largest source of losses for the public sector fuel retailers. As per news reports, the companies are incurring an underrecovery of about ₹700 on every 14.2 kg cylinder sold. The total daily loss on fuel sales is estimated at ₹600 crore to ₹700 crore. 

Import Costs Have Increased 

The cost of LPG has risen following supply disruptions in West Asia and the blockage of the Strait of Hormuz. The Saudi Contract Price, which is used as a benchmark for LPG imports, has increased by around 46% since the conflict began.  

Officials said the cost of supplying a domestic LPG cylinder has reached nearly ₹1,600, while the retail price in Delhi is ₹942. Under the Pradhan Mantri Ujjwala Yojana (PMUY), eligible households pay ₹642 after subsidy. 

Production Raised to Meet Demand 

Indian refiners have increased LPG production by around 60% from pre-conflict levels to about 52,000-53,000 tonnes a day to maintain domestic supplies.  

The government has also reduced the annual allocation of subsidised LPG cylinders under the PMUY scheme from 9 to 4.  

Read More: India Maintains 76 Days Fuel Reserves Ensuring Secure Oil Supplies! 

Conclusion 

Recent fuel price increases have reduced losses on petrol and diesel sales, but state-run oil companies continue to face underrecoveries on LPG as higher international prices keep input costs elevated. 

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