Jefferies’ Energy Market Letter, released on May 28, warned that India’s oil marketing companies are hemorrhaging ₹30 per litre on diesel as freight and crude costs surge amid the Middle East war.
The report cites a 15‑day average loss, with freight rates having climbed 8% last week and shipping now accounting for more than a quarter of the landed price of crude, up from just 3% before the conflict.
Crude flows from the Middle East, excluding Iran, have fallen to roughly 75% of pre‑war levels, a sharp drop from the 95% seen at the end of September, Jefferies noted.
Even though refining margins remain high, the higher procurement and transport costs are eroding marketing profits; a few distributors in Delhi have already reported first‑quarter losses of up to 12%, prompting concerns over job security.
Industry leaders are calling on the government to step in, warning that without intervention, domestic fuel prices could rise and the downstream sector may suffer layoffs.