Archive · 24 Sep 2026
Indian Oil Firms Face ₹530-Crore Daily Losses as Crude Surges
India’s state-owned oil companies buy crude oil and sell petrol, diesel and cooking gas.
Crude oil has become much more expensive because of conflict and supply problems around West Asia.
Retail fuel prices in India have not risen enough to cover the higher costs.
As a result, the three companies lose money on the fuel they sell.
ICRA estimates their combined loss is about ₹530 crore every day.
The companies lose about ₹8 on each litre of petrol and ₹9 on each litre of diesel.
They also lose about ₹300 on each household LPG cylinder, after losing about ₹500 per cylinder in the first quarter of FY27.
Their refineries are earning stronger margins, but those gains may not cover the selling losses.
If high prices continue, the companies may need more working capital and short-term borrowing.
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are losing about ₹530 crore daily on fuel marketing.
ICRA estimates under-recoveries of ₹8 per litre on petrol, ₹9 on diesel and about ₹300 per domestic LPG cylinder.
India’s crude oil basket reached $117.4 per barrel on September 21, 2026, compared with about $66 in FY26.
Crude prices rose amid the renewed US-Iran conflict, Saudi Arabia’s East-West pipeline shutdown and increased Houthi activity around the Red Sea.
Strong refining margins above $10 per barrel offer only partial relief as unchanged retail prices pressure profitability, cash flows and borrowing needs.
- Who
- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, as assessed by rating agency ICRA.
- What
- The three state-owned oil marketing companies are incurring substantial under-recoveries on petrol, diesel and domestic LPG sales.
- When
- The estimates concern September 2026 and financial year 2026-27; India’s crude basket reached $117.4 per barrel on September 21, 2026.
- Where
- India, with the supply disruptions affecting crude markets centered on West Asia and the Red Sea region.
- Why
- International crude and petroleum-product prices rose sharply while domestic retail fuel prices remained unchanged or did not increase enough to cover costs.
- Combined daily fuel-marketing loss
- About ₹530 crore
- Petrol under-recovery
- Approximately ₹8 per litre
- Diesel under-recovery
- Approximately ₹9 per litre
- September domestic LPG under-recovery
- Approximately ₹300 per cylinder
- Cumulative negative LPG buffer
- ₹61,940 crore as of June 30, 2026
- Indian crude oil basket
- $117.4 per barrel on September 21, 2026, versus about $66 in FY26
- Refining margin
- Singapore gross refining margins remained above $10 per barrel since the West Asia crisis intensified
- Potential FY27 auto-fuel under-recovery
- About ₹64,000 crore if Brent averages $105-$115 per barrel and retail prices are not increased
Sources
OMCs face Rs 530 crore daily fuel losses amid surging crude prices: ICRA Report
Oil Marketing Companies Face ₹530-Crore Daily Fuel Losses, Surging Crude Prices Deepen Pressure on Petrol and Diesel Margins: ICRA
Why India’s oil marketing companies are losing over Rs 500 crore daily
