State-run oil companies in India have faced losses exceeding Rs 1 lakh crore in just 10 weeks. This financial strain is due to keeping fuel prices stable despite rising global costs linked to the ongoing conflict in the Middle East. These companies—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—are currently losing about Rs 1,600 to Rs 1,700 crore daily.
As global crude oil prices jump, petrol and diesel have remained unchanged in India at Rs 94.77 and Rs 87.67 per litre respectively. Although LPG prices saw an increase of Rs 60 per cylinder in March, they still don’t reflect actual costs.
The main issue is the difference between the cost of fuel and its selling price, a gap known as under-recovery. Despite the turmoil, these companies have managed to maintain supplies for petrol, diesel, and LPG, even as nearly 40% of crude oil imports and 90% of LPG imports were disrupted. A source emphasized that strong oil marketing companies are vital for India’s energy security and economic stability.
Experts warn that if high crude prices continue, these firms may need to borrow more to stay operational. The decision to hike fuel prices has turned into a political matter, with the government needing to carefully consider both timing and scale.
In a move to ease financial pressures, the government reduced excise duties—cutting petrol from Rs 13 to Rs 3 and diesel from Rs 10 to zero. This resulted in a significant revenue loss of around Rs 14,000 crore monthly.
Despite the challenges, the government’s commitment to future investments in refining, biofuels, and energy security remains steadfast.
To highlight broader trends, a recent survey found that nearly 60% of Indian citizens support government intervention in fuel pricing, emphasizing public concern over rising living costs in light of global crises.
For more insights on fuel pricing and its effects on the economy, you can check out the Economic Times for analysis and updates.
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Fuel price hike,Oil marketing companies,Middle East conflict impact on fuel prices,Crude oil prices,Losses due to fuel prices
