New Delhi: Amid high oil prices, state-owned oil marketing companies (OMCs) are losing out ₹20 per liter when selling gasoline and the surrounding area ₹100 for the sale of diesel, said Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas.
Denying reports of a likely rise in fuel prices up to the top ₹28 per liter after the ongoing assembly elections, Sharma said that although global prices are volatile, steps such as reduction in excise duty on petrol and diesel have been taken to protect consumers from price gouging.
The statement takes on significance because the elections to the regional assembly are scheduled to end on April 29. While elections in Assam and Kerala were held on April 9, polls in Tamil Nadu and the first phase of polling in West Bengal were held on Thursday. The second phase of elections in West Bengal will be held on April 29.
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Addressing the media on developments in West Asia and the state of fuel stocks in the country, a senior petroleum ministry official noted that international oil prices are highly volatile and despite this, the government has not increased the prices of conventional fuels.
“If you look at the crude basket, the oil that we were buying at $70 per barrel last year has gone up to an average of over $113 per barrel this month…even though the government has not increased the price, and the government’s effort has been to keep the price stable…to absorb the volatility, the government…has reduced the excise duty so that the burden is not passed on to our consumers,” she said.
The price of stability
On March 27, the Ministry of Finance reduced excise duty on gasoline and diesel by ₹10 per liter.
“Even now, the oil marketing companies have insufficient recovery, which varies from day to day and can be around ₹20 for gas and around ₹100 on diesel,” Sharma added.
The prices of regular gasoline and diesel have remained almost unchanged since March 2024. In the capital of the state, the price of gasoline is ₹94.77 per liter by state-run oil marketing companies, while diesel is sold at ₹87.67 liters.
Private refiners and oil marketing companies Nayara and Shell, which operate a total of about 8,500 of the aforementioned 100,000 petrol pumps in the country, have already increased fuel prices. Other sellers have not yet increased the prices of regular gasoline and diesel.
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State-owned OMCs have increased prices of premium diesel and petrol, which account for 4% of total fuel sales, along with a share of industrial diesel, which is bought in bulk by industry and agriculture.
Although OMCs are currently facing losses or a lackluster recovery, they have also benefited as global oil prices have been largely subdued over the past few years and retail fuel prices have remained largely stagnant.
For most of FY26, oil prices remained muted in the $60-$70 per barrel range and retail fuel prices were flat, leading to significant gains for these OMC. Their combined net profit in the first half of fiscal year 26 ended ₹34,000 crore in the first half of FY25.
Since India imports 90% of its oil needs, the surge in oil prices plays a key role in the current account deficit. An increase of 1 dollar per barrel leads to an annual increase of approx ₹16,000 crore in the country of import account. In FY25 in India the oil import bill was $137 billion.
Supply risks
Ongoing blockade Iran’s closure of the Strait of Hormuz, along with the US Navy’s naval blockade of Iranian ports, have further restricted global energy supplies through the key channel, which has traditionally been the supply route for 20% of global oil and gas.
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The strait is a critical energy artery for India, which generally accounts for about 60% of its territory crude oil imports, almost 50% of liquefied natural gas (LNG) imports and 90% of liquefied petroleum gas (LPG) imports.
The June Brent contract on the Intercontinental Exchange was at $102.90 a barrel, up 0.93% from its previous close, while the May West Texas Intermediate contract on the NYMEX rose 1.31% to $94.18 a barrel.
