India’s state-run oil marketing companies have absorbed estimated losses of around ₹30,000 crore since mid-March after maintaining stable retail fuel prices despite a sharp global energy shock triggered by geopolitical tensions in West Asia, according to sources familiar with the matter. Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) continued uninterrupted supplies of petrol, diesel, liquefied petroleum gas (LPG), aviation turbine fuel, and other petroleum products during the crisis period. This was done even as input crude oil costs surged by more than 50%, placing heavy pressure on refining margins and supply chains.

The situation intensified after conflict escalation in West Asia disrupted shipping routes through the Strait of Hormuz, a critical corridor for global oil trade. Panic buying and supply uncertainty pushed demand higher, stretching logistics networks and refinery operations. Despite these challenges, officials said there were no fuel shortages or supply interruptions across the country, and retail prices remained unchanged.

Sources estimated that the three oil marketing companies collectively incurred under-recoveries—defined as the gap between procurement costs and retail selling prices—of about ₹30,000 crore. Without government intervention, including excise duty cuts, the losses could have nearly doubled to around ₹62,500 crore. The Centre reduced excise duty on petrol by ₹10 per litre and diesel by ₹10 per litre, helping cushion the impact on both consumers and oil firms.

Also Read: Commercial LPG Prices Increased By ₹993 Following Rise In Global Crude Oil Rates

At the peak of the crisis, Brent crude prices, the global benchmark, surged sharply amid fears of supply disruptions. Prices reportedly spiked from around $72 per barrel before the escalation to as high as $144 per barrel during heightened tensions, significantly increasing import costs for India, which relies heavily on crude imports for domestic consumption.

Despite these pressures, retail fuel prices in India remained steady at approximately ₹94.77 per litre for petrol and ₹87.67 per litre for diesel. Daily under-recoveries during the period were estimated at ₹600–700 crore, with per-litre losses reaching as high as ₹18 for petrol and ₹25 for diesel in April, according to sources.

Oil companies also faced additional costs from emergency crude procurement, higher shipping freight due to rerouted tankers, increased marine insurance premiums, and refinery optimisation expenses. However, officials said supply continuity was prioritised to avoid economic disruption, particularly in transport and logistics sectors dependent on stable fuel availability.

The Indian approach stood in contrast to several other countries, where retail fuel prices rose significantly during the same period, including double-digit increases across Europe and parts of Asia. Analysts noted that India’s decision to shield consumers helped maintain economic stability but placed considerable financial strain on state-run oil firms, raising concerns over future borrowing and investment flexibility if high crude prices persist.

Also Read: Fuel Retailers Face Massive Losses As Petrol, Diesel Prices Remain Frozen