Panel grids Focus on OMC’s failure to absorb oil shock

Members of both the opposition and the ruling party have expressed concern about the impact of the US-Iran dispute on the Indian economy. File | Photo credit: The Hindu

The Parliamentary Standing Committee on Finance, headed by BJP leader Bhartruhari Mahtab, on Thursday (June 4, 2026) questioned the government as to why despite high profits, oil marketing companies were unable to absorb the oil shock due to the US-Iran dispute.

Thursday’s (June 4) meeting, attended by officials from the Ministry of Economy and the government’s chief economic adviser, was the first in a series of talks on the “General Economic Situation in the Country.”

Members of both the opposition and the ruling party have expressed concern about the impact of the US-Iran dispute on the Indian economy.

According to sources, senior Congress leader Manish Tewari questioned the government on the recent hike in fuel prices, among other things. Ruling party MPs PP Chaudhary, Sanjay Seth and Dinesh Sharma were among those who wanted to know the inflationary impact of the current crisis in the next quarter.

One member pointed out that OMCs during the last financial year (FY 2025-26) saw a profit increase of almost 130% and even in the last quarter their revenue was 40% higher than the corresponding quarter of the previous financial year. Opposition members demanded to know why the OMCs were unable to absorb the recent shock. Officials, according to sources, cited international statistics to reiterate the government’s position that the impact on fuel prices in India was limited compared to global trends. Dissatisfied with the response, the panel asked the government to come up with a detailed reply.

Questions were also raised regarding the heavy dependence of domestic producers on the import of raw materials for the production of fertilizers and its impact on the economy. According to sources, the government has assured that there is enough stock to see through the Rabi season and efforts are on to procure more for the Kharif season.

The decline in foreign direct investment and foreign portfolio investment was also mentioned, although several members were not satisfied with the government’s response, according to sources. Even members of the ruling party have expressed concern over retail inflation, especially rising prices of staple foods.

Published – 04 Jun 2026 22:48 IST