Oil Firms Bleed Rs 14-18 Per Litre on Petrol, Diesel as Crude Prices Surge Post-West Asia Crisis

Oil marketing companies in India are currently facing significant financial pressure as they are reportedly selling petrol and diesel at steep losses due to rising global crude oil prices. According to industry estimates, petrol is being sold at an under-recovery of around ₹14 per litre, while diesel losses are estimated at approximately ₹18 per litre, as international oil prices continue to remain elevated following geopolitical tensions.

The widening gap between retail fuel prices and global crude costs has squeezed marketing margins for state-run fuel retailers, which are unable to fully pass on higher input costs to consumers due to pricing constraints. This has created sustained financial strain across the sector, with companies absorbing losses on every litre of fuel sold in the domestic market.

In addition to petrol and diesel losses, the impact of higher energy prices is expected to significantly affect the broader energy subsidy burden. Estimates suggest that under-recovery on liquefied petroleum gas (LPG) could reach nearly ₹80,000 crore in the current fiscal year. At the same time, fertiliser subsidies are projected to rise sharply, ranging between ₹2.05 lakh crore and ₹2.25 lakh crore, further adding to fiscal pressure.

Also Read: UN Reports 21 Executions And Over 4,000 Arrests In Iran Since Conflict Escalation

The situation has been aggravated by supply disruptions linked to tensions in West Asia, particularly concerns around the Strait of Hormuz, which handles a substantial share of global oil and liquefied natural gas trade. These disruptions have tightened global supply, pushing up prices of fuels, fertilisers, and petrochemical products, thereby increasing cost pressures across multiple downstream industries.

Rating agency ICRA has noted that such global supply constraints are likely to sustain volatility in energy markets, keeping input costs elevated for oil marketing companies and related sectors. As a result, the outlook for fuel pricing and subsidy burden remains uncertain, with continued dependence on government support and global price movements shaping the near-term scenario.

Also Read: Russia Confirms Victory Day Parade Without Military Hardware For First Time Since 2008