India’s oil-marketing companies are incurring losses of about ₹30,000 crore every month on the sale of petrol, diesel and liquified petroleum gas (LPG) as they hold steady retail fuel prices amidst elevating prices of crude oil, informed Sujata Sharma, Joint-Secretary at the Union Petroleum Ministry.
Responding to a query, the senior bureaucrat stated, “If you ask about the under-recovery of the three (that is, petrol, diesel and LPG combined), it is about ₹30,000 crore in a month.”
Ms. Sharma further told reporters that OMCs were incurring the losses despite the government having reduced excise duties on petrol and diesel earlier.
“Our OMCs are buying crude oil at higher rates but are not selling at corresponding rates to protect our consumers, this impacts their finances,” she stated, “To alleviate this pressure [on OMCs], the government reduced the excise duties on retail fuel and forewent revenue of ₹14,000 crore in a month. Notwithstanding the same, OMCs are incurring under-recoveries on petrol, diesel and LPG.”
Escalating tensions in West Asia, which have now extended for more than sixty days, have marred shipping across the Strait of Hormuz, which accounts for one-fifth of the global energy trade. In turn, this has resulted in prices of crude oil, among other energy-related base products, spiralling upwards.
Thus, also translates into price pressures on fuels processed for retail consumption, such as petrol, diesel and LPG. At the time of writing, benchmark Brent Crude futures (for July 2026) were trading 0.7% higher over their previous close at $100.75 for every barrel.
According to provisional data from the Petroleum Planning and Analysis Cell (PPAC), the consumption of petrol increased about 6.36% in April compared to the corresponding period last year whilst that of diesel rose 0.25%.
Further, since the onset of the tensions, consumption of LPG declined 15.7% in March when assessed from the preceding month, and 7% in April.
This emanates from the government seeking to regulate the allocation of the bottled commercial gas cylinders to industries and commercial establishments.
Following a staggered approach, on March 27, the government had increased the allocation of the bottled hydrocarbon gas to commercial and industrial establishment to up to 70% of pre-crisis levels. This included a 10% quantum conditioned on facilitating transition to piped natural gas – seeking to ease pressure on LPG.
In fact, indicative of elevating price pressures, price of commercial LPG cylinder was hiked by ₹993 per cylinder whilst that of 5-kg free trade LPG by ₹261 per cylinder May 2, the latter being particularly imperative for migrant populations in urban and semi-urban areas.
This was the second such hike for both variants of LPG cylinders. The first of these hikes was done on April 1. Although, essential to note, the government had also doubled the allocation of the 5-kg FTL cylinders to all States on April 8.
13 India-flagged vessels in the Western part of the Hormuz Strait
Speaking to reporters at the same briefing, Opesh Kumar Sharma, Director at the Ministry of Ports, Shipping & Waterways, informed that there are 13 India-flagged vessels operating in the Strait of Hormuz.
This includes one LPG tanker, five crude oil tankers, one chemical products tanker, three container ships, two bulk carriers and one dredger.
