Fuel Retailers Face Massive Losses As Petrol, Diesel Prices Remain Frozen
State fuel retailers face rising losses as petrol and diesel prices remain frozen despite global crude fluctuations.
India’s state-run fuel retailers are continuing to absorb heavy losses as retail petrol and diesel prices remain unchanged since April 2022, even as global crude oil price volatility persists and input costs fluctuate sharply.
The state-owned oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited — are reportedly incurring losses of around ₹18 per litre on petrol and ₹35 per litre on diesel. Despite deregulation of fuel pricing over a decade ago, retail pump rates have not been revised since April 2022, leading to a widening gap between market-linked costs and selling prices.
According to industry estimates cited in reports, the combined daily losses of these companies have reached nearly ₹1,600 crore. This figure had previously peaked at about ₹2,400 crore per day before a recent cut in excise duty by the government reduced some of the pressure on balance sheets, although consumers did not see a corresponding change in retail prices.
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The financial strain comes amid sharp swings in global crude oil markets, which have ranged from above $100 per barrel following geopolitical tensions to lower levels near $70 earlier, before rising again due to fresh supply concerns. Analysts say these fluctuations have made it difficult for oil marketing companies to fully recover costs without revising pump prices.
A recent industry assessment noted that at elevated crude price levels, every $10 per barrel increase can add roughly ₹6 per litre to losses for fuel retailers. It also warned that even a complete removal of excise duties would not fully offset current under-recoveries, highlighting the scale of the pricing gap in the sector.
India, which imports the majority of its crude oil needs, remains highly exposed to global energy market volatility. Experts also caution that sustained high crude prices could affect the country’s fiscal deficit and current account balance, while adding pressure on government revenues and energy-linked subsidies.
Despite the financial stress on fuel retailers, no immediate change in retail prices is expected, with market watchers noting that pricing decisions are often influenced by broader economic and political considerations.
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