OMCs Still Losing Nearly ₹600 Crore Daily Despite Fuel Price Hikes

 State-owned oil marketing companies (OMCs) remain under financial pressure even after a series of petrol and diesel price increases.  

Government officials have indicated that daily losses are still close to ₹600 crore, reflecting the impact of elevated global energy prices and persistent under-recoveries in domestic fuel sales. 

The situation has been driven largely by geopolitical tensions in West Asia, which have significantly increased crude oil costs and affected India's energy import bill. 

Fuel Price Hikes Reduce but Do Not Eliminate Losses 

Petrol and diesel prices were revised upward for the fourth time within ten days on May 25. The latest revision increased petrol prices by ₹2.61 per litre and diesel prices by ₹2.71 per litre. 

With this adjustment, cumulative increases in both fuels have approached ₹7.5 per litre since daily price revisions resumed after a prolonged freeze.  

Despite these hikes, Sujata Sharma, Joint Secretary in the Petroleum Ministry, said OMCs continue to face substantial financial strain. 

According to Sharma, daily losses were previously around ₹1,000 crore and have declined following the recent revisions but still remain slightly below ₹600 crore per day. 

Government Absorbs Revenue Impact to Limit Consumer Burden 

Officials highlighted that the government attempted several measures before permitting fuel price increases. One of the key steps was the reduction of excise duty on petrol and diesel by ₹10 per litre. 

Sharma stated that the tax reduction resulted in a revenue impact of approximately ₹14,000 crore for the Centre. She also noted that domestic retail fuel price increases have been considerably lower than the rise witnessed in international markets. 

Globally, prices for motor spirit increased by around 22%, while high-speed diesel prices rose about 27%. In comparison, domestic price increases were estimated at 7.7% for petrol and 8.6% for diesel. 

Government Prioritises Domestic Fuel Availability 

The government has reiterated that meeting domestic fuel demand remains its primary focus. Authorities continue to monitor supply conditions while ensuring refiners have access to crude grades that are technically and commercially suitable. 

Officials have also stressed that India will continue sourcing crude oil required to maintain uninterrupted fuel availability across the country despite ongoing global market uncertainties. 

Read More: India’s LPG Sales Falls 13% in April 2026 as Hormuz Closure Cuts Supply! 

Conclusion 

Although multiple fuel price revisions have reduced losses at state-run oil marketing companies, daily under-recoveries remain close to ₹600 crore. Elevated crude oil prices, LPG-related losses and volatile global energy markets continue to weigh on the sector despite government intervention through excise duty reductions and fuel price adjustments. 

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