Under-recoveries incurred by India’s oil marketing companies (OMCs) on the sale of petrol and diesel have declined significantly in recent weeks, reflecting the impact of successive fuel price revisions and government support measures. According to data shared by the Ministry of Petroleum and Natural Gas, losses on fuel sales have narrowed considerably despite continued volatility in global energy markets.

Officials said under-recoveries on petrol have fallen by 83 per cent, declining to ₹3 per litre from ₹24 per litre recorded on April 1. Diesel under-recoveries have also reduced substantially, dropping by 75 per cent to ₹27 per litre from ₹105 per litre during the same period. The reduction indicates that recent pricing adjustments have helped ease financial pressure on state-run fuel retailers.

The improvement follows a series of fuel price hikes implemented in phases during May. The Centre approved four revisions on May 15, 19, 23, and 25, resulting in a cumulative increase in retail fuel prices. Following these adjustments, petrol prices in Delhi rose from ₹94.77 per litre to ₹102.12 per litre, while diesel prices increased from ₹87.67 per litre to ₹95.20 per litre. Officials estimate that the revisions significantly reduced losses borne by oil marketing companies.

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Government data also showed that daily under-recoveries fell to around ₹600 crore in May after the latest round of price increases. This marked a further decline from approximately ₹750 crore per day recorded earlier in the month. The reduction has provided some relief to OMCs that have faced mounting pressure from rising crude oil prices and elevated import costs over recent months.

The Centre has simultaneously sought to shield consumers from the full impact of global fuel price increases. According to official estimates, the government forewent nearly ₹1.23 lakh crore in revenue through excise duty reductions on petrol and diesel over a 78-day period. The measure was intended to cushion households and businesses from sharp increases in transportation and energy costs while supporting the financial stability of fuel retailers.

The developments come against the backdrop of disruptions in global energy markets linked to geopolitical tensions in West Asia and concerns over shipping through the Strait of Hormuz. These factors have contributed to higher international fuel prices and increased costs for import-dependent economies such as India. While under-recoveries have narrowed, policymakers and industry observers continue to monitor global crude oil trends and their potential impact on domestic fuel pricing in the months ahead.

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