Indian Oil Firms Lose ₹30,000 Crore Holding Fuel Prices Amid Global Energy Shock

State-owned oil marketing companies—Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum—incurred an estimated ₹30,000 crore in losses since mid-March by maintaining stable retail fuel prices amid a severe global energy disruption. The decision came as Brent crude prices surged from $72 to nearly $144 per barrel following military strikes by the U.S. and Israel on Iran and the closure of the Strait of Hormuz, a critical energy transit route.

The government cut excise duties on petrol and diesel by ₹10 per litre each, reducing the special additional excise duty on petrol to ₹3 from ₹13 and eliminating it on diesel. These measures, along with partial cost absorption, limited the financial burden on oil companies, which otherwise would have faced under-recoveries of ₹62,500 crore. Daily losses peaked at ₹600–700 crore, with under-recoveries of ₹18 per litre on petrol and ₹25 per litre on diesel in April.

Despite panic buying, supply chain disruptions, higher freight and insurance costs, and emergency crude sourcing, fuel and LPG supplies remained uninterrupted across India. The government prioritized economic stability and consumer protection, avoiding price hikes seen in other countries—where fuel prices rose between 22% and 34%—and implementing no rationing or mobility restrictions.

Officials warned that prolonged high crude prices could increase working capital borrowings and require adjustments to capital expenditure plans, though essential investments in refining, biofuels, and energy security will continue with state support. The finance ministry is assessing the fiscal impact, and the next formal review of fuel pricing policy is scheduled for June.