State-run oil marketing companies (OMCs) are still losing ₹750 crore a day on the sale of auto fuels and cooking gas even after petrol and diesel rates were raised by ₹3 per litre each on Friday, a government official said, offering no comment on further hikes of fuel rates.
“Losses are still there on the OMCs and now also it will be in the range of may be ₹750 crore per day. And that includes petrol, diesel and LPG [liquefied petroleum gas] -- everything put together,” petroleum ministry’s joint secretary Sujata Sharma said on Monday’s inter-ministerial briefing on the impact of the West Asian crisis on India.
Days before oil companies raised pump prices of petrol and diesel by ₹3 per litre each on May 15, petroleum minister Hardeep Singh Puri had said that OMCs were incurring losses of Rs1,000 crore daily on the sale of the three fuels.
The losses are on account of an increase in the price of crude oil -- up 51% between February 28, when the US-Israel attack on Iran began, and Monday -- but have been amplified by a depreciating rupee, which has fallen X% against the dollar since the beginning of the year. India imports 88% of its crude oil requirements.
That could mean another increase in retail fuel rates, something also suggested by State Bank of India’s latest research report that said Friday’s price increase would likely offset only 15% of the total loss of OMCs in 2026-27.
{{/usCountry}}That could mean another increase in retail fuel rates, something also suggested by State Bank of India’s latest research report that said Friday’s price increase would likely offset only 15% of the total loss of OMCs in 2026-27.
{{/usCountry}}Sector experts and industry executives said a second fuel price hike is imminent if global oil prices remain elevated because of ongoing conflict in the West Asia and the key sea route for energy shipments through the Strait of Hormuz remains a challenge. Sharma admitted on Monday that even after two-and-a-half months of the West Asia crisis, the situation at the strait is “not normal” , pushing up prices of crude oil, natural gas and liquefied petroleum gas (LPG or cooking gas).
But she said she could not “predict” whether there will be another increase in retail fuel prices.
Sharma, however, added that there is no supply crunch for either crude oil or refined products. She said that notwithstanding any sanction on purchases of Russian crude oil --which, she added, has always met its energy requirements on commercial principles -- India’s energy supplies are safe.