Indian Oil Companies Losing ₹30,000 Crore Every Month As Fuel Price Pressure Mounts

India’s major Oil Marketing Companies (OMCs) are facing mounting financial stress as rising global crude oil prices continue to widen losses on petrol, diesel, and LPG sales. According to officials from the Ministry of Petroleum and Natural Gas, state-run fuel companies are currently absorbing under-recoveries of nearly ₹30,000 crore every month to keep domestic fuel prices stable.

During an inter-ministerial briefing in New Delhi regarding the ongoing West Asia crisis, Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas, stated that Indian OMCs are purchasing crude oil, LPG, and natural gas at significantly elevated international prices while continuing uninterrupted fuel supply across the country.

Global crude oil prices have surged from nearly $70 per barrel to over $120 per barrel amid escalating geopolitical tensions in West Asia. Despite this sharp increase, the Indian government has largely avoided passing the full burden onto consumers, maintaining stable retail prices for petrol, diesel, and domestic LPG.

Officials said the government has also reduced excise duties, resulting in an additional revenue impact of nearly ₹14,000 crore every month. These measures were introduced to ease financial pressure on consumers and prevent sudden inflationary shocks in the domestic market.

India’s approach differs sharply from many global economies where fuel prices have risen significantly in recent months. Several countries across Europe and Southeast Asia have revised retail fuel prices multiple times to protect the financial stability of their energy companies. In contrast, India has focused on internal adjustments and subsidy mechanisms to shield households from rising energy costs.

The government also highlighted efforts to maintain energy security by prioritizing domestic LPG supply and expanding PNG connectivity to consumers. However, experts warn that continued under-recoveries at current levels may become difficult to sustain for long periods.

Industry officials noted that India’s energy sector requires annual capital investments of nearly ₹1.3 lakh crore to ₹1.5 lakh crore for refinery expansions, pipeline infrastructure, and capacity growth. Major projects, including the Numaligarh Refinery and the Barmer Refinery, are part of the country’s long-term energy security plans.

With losses continuing to rise every month, analysts believe the government may soon face a difficult choice between maintaining fuel price stability and protecting the financial health of India’s oil companies.