OMCs bleed ₹30,000 crore monthly as govt shields fuel prices
OMCs bleed ₹30,000 crore monthly as govt shields fuel prices
Oil marketing companies are absorbing about ₹30,000 crore in monthly losses as crude prices surge, while the government shields consumers from sharp fuel price hikes.
Oil Marketing Companies (OMCs) in India are absorbing a staggering ₹30,000 crore every month due to massive under-recoveries on petrol, diesel and LPG. In an Inter-Ministerial briefing in New Delhi on the West Asia crisis, Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas (MoPNG), revealed the scale: "OMCs are buying Crude, LPG, and Natural Gas at very high levels," Sharma said, noting that despite the international spike, the government has ensured "uninterrupted supply to domestic households" and "no rationing of petrol or diesel."
To cushion the burden, the government has been absorbing a revenue loss of about ₹14,000 crore per month after cutting excise duties, a move aimed at keeping retail prices steady for consumers. This strategy of price insulation stands in sharp contrast to global trends observed by agencies like the IEA and IMF, which have shown more pass-through of volatility in other markets.
With crude oil prices spiking from around $70 to over $120 per barrel amid West Asia tensions, the sustainability of this approach remains a live concern. Officials emphasise that the objective is to shield households, but the balance sheets of state-owned oil firms are bearing the collateral damage.
Analysts say the situation could force policy choices down the line, particularly if crude stays elevated or if subsidy support is adjusted. Consumers are watching closely for any future price signals while the government weighs fiscal implications and energy security.
