Mounting Losses for Oil Firms; Fuel Price Hike Likely After Elections

New Delhi: India’s state-run oil companies are under mounting financial pressure as global crude prices rise, while domestic fuel rates remain frozen. Reports indicate losses have climbed to nearly ₹18 per litre on petrol and ₹35 per litre on diesel.
Despite fuel pricing being deregulated years ago, major public sector companies like Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum have held prices steady since April 2022, absorbing the financial strain.
Global crude oil prices, which had dipped to around $70 per barrel earlier this year, surged again due to tensions in West Asia, briefly touching $120 per barrel. Currently, prices remain elevated between $95 and $100 per barrel.
At the peak of last month’s surge, oil companies were reportedly losing nearly ₹2,400 crore per day. Following a ₹10 per litre cut in excise duty by the government, daily losses reduced to around ₹1,600 crore. However, this relief has not been passed on to consumers, instead helping companies partially offset their losses.
Experts note that every $1 increase in crude oil prices adds an estimated ₹6 per litre loss for these firms.
With crucial elections underway in West Bengal and Tamil Nadu, fuel prices are expected to remain unchanged for now. However, reports suggest a likely price hike by the end of the month once the الانتخابات conclude.
India, which imports nearly 88% of its crude oil needs, remains highly vulnerable to global price fluctuations—making a fuel price revision increasingly inevitable.