News Summary
- State-run oil firms IOC, BPCL, and HPCL together lose Rs 1,600 crore every day on fuel sales.
- OMCs lose Rs 18 per litre on petrol and Rs 35 per litre on diesel at current pump prices.
- Retail fuel prices in India have not changed since April 2022, a freeze of over three years.
- Global crude oil prices have surged past $120 per barrel due to the ongoing Iran war.
India’s three state-run oil firms are absorbing massive daily losses to keep petrol and diesel prices stable for consumers. Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) together lose an estimated Rs 1,600 crore every single day. The losses stem from a retail price freeze that has held since April 2022, even as global crude costs have climbed sharply.
Global crude oil recently crossed $120 per barrel, driven by supply fears from the Iran war. India imports the vast majority of the oil it consumes, so every dollar rise in crude directly widens the gap between what OMCs pay and what they charge at the pump.
What Petrol and Diesel Actually Cost versus What You Pay
If pump prices reflected actual input costs today, petrol would cost around Rs 113 per litre and diesel around Rs 123 per litre. Instead, OMCs sell at well below those levels across most Indian cities.
| Metric | Petrol | Diesel |
|---|---|---|
| India pump price now | Rs 94–105/litre | Rs 87–90/litre |
| Cost-based price | Rs 113/litre | Rs 123/litre |
| Loss per litre | Rs 18 | Rs 35 |
The diesel loss of Rs 35 per litre is particularly steep and has widened as crude surged in recent weeks.
Government Steps In, But Relief Is Limited
After the Iran war escalated, the Indian government cut excise duties on petrol and diesel. That cut reduces government revenue directly. However, industry analysts say most of the benefit goes toward softening the OMCs’ losses rather than lowering pump prices further.
Siddharth Maurya, Managing Director of Vibhavangal Anukulkara, put the scale of the problem plainly. “Oil companies in India are losing an estimated Rs 1,600 crore a day. If this continues, the losses for the companies will reach Rs 45,000–50,000 crore a month,” he said. Maurya added that suppressing fuel prices may help hold inflation steady, but the current situation is clearly unsustainable from a policy standpoint.
Analysts expect the daily losses to drag down quarterly earnings for all three PSU fuel retailers. The longer the retail price freeze holds against elevated crude costs, the deeper the hit to their balance sheets.
OMC Daily Loss Metrics
| Metric | Value | Notes |
|---|---|---|
| Petrol loss per litre | Rs 18 | OMCs sell below cost |
| Diesel loss per litre | Rs 35 | Loss widened with crude surge |
| Daily total loss | Rs 1,600 crore | Across all three PSU fuel retailers |
| Last retail price freeze | Since April 2022 | No change for 3 years |
| Global crude (recent peaks) | $120+/barrel | Raises input cost for OMCs |
India Pump Price vs Cost-Based Price
| Scenario | Petrol Price | Diesel Price |
|---|---|---|
| India pump price now | Rs 94–105/litre | Rs 87–90/litre |
| Actual cost-based price | Rs 113/litre | Rs 123/litre |
| Gap per litre | Rs 18 | Rs 35 |
Frequently Asked Questions
Why are Indian petrol and diesel prices not rising despite high global crude?
State-run oil firms IOC, BPCL, and HPCL have kept retail prices frozen since April 2022 to protect consumers from global price swings. They absorb the difference as a daily operating loss, currently estimated at Rs 1,600 crore across all three firms.
How much would petrol and diesel cost if prices matched actual input costs?
Based on current crude prices, petrol would cost around Rs 113 per litre and diesel around Rs 123 per litre. Most Indian cities currently pay Rs 94–105 for petrol and Rs 87–90 for diesel.
What has the Indian government done to help oil companies?
The government announced a cut in excise duties on petrol and diesel after the Iran war pushed crude prices higher. Analysts say this reduces government revenue but provides only limited relief to the oil firms, as most of the cushioning goes toward reducing their losses rather than cutting pump prices.
Which oil companies are bearing these fuel losses in India?
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) are the three state-run firms bearing the losses. Together they control most petrol and diesel retail sales in India.
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