India Oil Firms Lose Rs 1,600 Crore Daily on Petrol and Diesel

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.

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.