Middle East Disruptions Force ₹1,600-1,700 Crore Daily Burden on Indian Oil PSUs to Insulate Nation from Global Energy Crisis

As per the PTI report, India’s state-owned oil companies are dealing with significant financial strain as they protect domestic consumers from global energy price increases.  

This protection comes at a daily cost of ₹1,600-1,700 crore, amounting to over ₹1 lakh crore in under-recoveries over 10 weeks, driven by disruptions in the Middle East. 

Daily Financial Strain on State Oil Firms 

State-owned oil marketing companies (OMCs) like Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum have been sustaining daily losses of ₹1,600-1,700 crore.  

Despite rising crude oil prices, a 50% increase, petrol and diesel prices remain at ₹94.77 and ₹87.67 per litre respectively. The firms are incurring these costs to ensure that consumers are not burdened with high prices. 

Substantial Impact on OMCs’ Operations 

The financial toll on OMCs exacerbates as crude prices rise. To maintain continuous supply, they face increasing pressure to borrow funds, affecting their overall financial health and operational capacity for future projects in refinery expansions and energy security infrastructure development. 

Read More: Mustard Oil Demand Surges as Costly Palm, Soy Oils Push Indian Consumers to Switch! 

Government’s Role and Excise Duty Reductions 

The government has intervened to ease the financial load by reducing the special additional excise duty on petrol to ₹3 per litre and eliminating the duty on diesel.  

This action costs the government ₹14,000 crore monthly. However, the companies are still required to maintain affordability without adjusting consumer prices, unlike other countries dealing with similar energy crises. 

Conclusion 

Keeping fuel prices stable over world market fluctuations has been financially challenging for India’s state-linked oil firms. Large-scale under-recoveries highlight the tension between maintaining domestic economic stability and the firms’ financial sustainability. The government’s intervention has offered some relief, but the continuous losses are a growing concern. 

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