India's State-Run Oil Firms Face Rs 30,000 Crore Monthly Loss

India's state-run oil marketing companies, including Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd, are absorbing losses of nearly Rs 30,000 crore every month to keep petrol, diesel, and LPG prices unchanged despite the sharp surge in global energy prices triggered by the West Asia conflict. The financial burden comes as crude oil prices climbed from about $70 per barrel two months ago to nearly $120 amid supply disruptions and rising shipping risks in the Strait of Hormuz.

According to joint secretary in the ministry of petroleum and natural gas Sujata Sharma, the government had so far prioritised shielding consumers from higher fuel costs despite volatility in international markets, with daily under-recoveries during April touching around Rs 18 per litre on petrol and Rs 25 per litre on diesel.

The crisis was triggered by the February 28 strikes by the United States and Israel on Iran, which escalated tensions across West Asia, disrupting tanker movement across key route Strait of Hormuz and raising freight and insurance costs.

The Centre has reduced excise duties to cushion the impact, with the special additional excise duty on petrol cut from Rs 13 per litre to Rs 3, and duty on diesel reduced from Rs 10 per litre to zero, resulting in a hit of Rs 14,000 crore a month. The government will continue to monitor the situation and may take further measures to mitigate the effects of the conflict on the oil market.