Recent fuel price hike cuts OMC's daily retail losses by ₹250 cr: Official

New Delhi: State-owned oil firms cut their combined daily losses to ₹750 million crowns ₹1,000 crore after a ₹Fuel prices rose by 3 liters since Friday but remained significantly under-recovered, a government official said.

Addressing the media on Monday, Sujata Sharma, Joint Secretary, Ministry of Petroleum, said that after the recent hike in petrol and diesel, the cumulative daily loss of the three OMCs – Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd – stands at ₹750 million crowns.

The increase in retail fuel prices is seen as a partial correction aimed at curbing the under-recovery faced by state-owned fuel retailers, which have absorbed a significant portion of rising international costs without fully passing them on to consumers.

Daily losses, borne mainly by public sector fuel retailers, have risen sharply in recent months due to increased oil prices and a mismatch between international fuel costs and domestic retail prices, industry officials said.

Key things

OMC’s daily losses fell to ₹750 crore after Friday’s price hike.
The combined under-recovery still stands at ₹1 trillion every quarter.
The cost of transporting LPG has more than doubled since the start of the war.
India will continue to buy Russian oil despite the expiry of the US exemption.
Kharif fertilizer stocks at 51%, well above the norm of 33%.

Petroleum Minister Hardeep Singh Puri last week said amid high energy prices and stagnant prices of petrol and diesel at petrol stations, OMCs are facing daily under-recovery ₹1,000 crore and quarterly under-recovery ₹1 trillion.

On India’s purchase of oil from Russia despite the end of exemptions from US sanctions, Sharma indicated that India will continue to buy from Russia and has never stopped buying oil from the country.

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“Regarding purchases from Russia, we have purchased before, during previous phases, and we continue to do so now. These are commercial decisions made by oil marketing companies based on national requirements and economic considerations,” she said.

The US exemption from sanctions on Russian oil expired over the weekend. The US has not yet talked about any extension of the exemption.

Fertilizer location

Further, talking about the stock of fertilizers in the country, Aparna S. Sharma, Additional Secretary, Ministry of Chemicals and Fertilizers, said that the availability of fertilizers for Kharif season remains more than 51% in the states and there is no major change in the maximum retail price (MRP) of major fertilizers.

“For Kharif In 2026, the fertilizer requirement has been assessed by the Ministry of Agriculture and Farmers’ Welfare at 39.05 million tonnes (mt), against which the stock to date is around 20.09 mt (over 51%), which is significantly higher than the usual level of about 33%,” she added. She assured that the country is in a much better position in case there is no fertilizer in the coming season.

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It further added that India has secured about 1.35 mt of DAP and 700,000 tonnes of NPK from the SOH (Strait of Hormuz) to arrive at Indian ports in May and June. Indian fertilizer companies have also floated a consolidated global tender for procurement of 400,000 tonnes of triple superphosphate (TSP) and 300,000 tonnes of ammonium sulphate. These will help ensure sufficient availability during the high season.

Indian fertilizer companies have also floated a combined global tender to procure 536,000 tonnes of ammonia and 594,000 tonnes of sulphur. These will help ensure sufficient availability during the high season.

“The availability of inputs for the production of fertilizers, i.e. urea and P&K fertilizers, is regularly checked by the Department of Fertilizers,” she added.

Shipping rates

Meanwhile, Mukesh Mangal, Additional Secretary, Ministry of Ports, Shipping and Waterways, mentioned that escalating geopolitical tensions have increased the cost of importing energy into India, with rates for transportation of liquefied petroleum gas (LPG), crude oil and containerized cargo rising sharply compared to the pre-war period.

LPG cargo rates have climbed from around $94 per tonne during the pre-war period to $207 per tonne on Friday. The cost of transporting oil has also increased. Rates for very large crude carriers (VLCCs), which carry bulk shipments of crude oil, increased from $14 per tonne to $28.64 per tonne as of May 15.

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Container shipping rates also rose, with the cost of a twenty-foot container (TEU) rising to nearly $2,000 from around $203, suggesting a broader supply chain disruption beyond the energy sector. The increase in shipping and handling charges has also led to higher import costs for oil marketing companies and refineries, especially for LPG, which India imports in large volumes to meet domestic demand. Higher logistics costs may also put pressure on retail fuel margins if global oil prices remain elevated.