Indian oil marketing companies are facing significant financial strain as they continue to sell petrol and diesel at a loss, despite rising crude oil prices and geopolitical tensions. The government's decision to cap retail fuel prices has left these companies bearing the brunt of higher input costs.
Losses on Auto Fuels
Currently, oil companies are incurring a loss of Rs 14 per litre on petrol and Rs 18 per litre on diesel. These under-recoveries stem from the inability to pass on the full impact of elevated crude oil prices to consumers, as retail prices remain artificially low.
LPG Under-Recoveries
The situation is equally challenging for liquefied petroleum gas (LPG). Projections indicate that LPG under-recoveries could reach a staggering Rs 80,000 crore by the fiscal year 2027 if current pricing trends persist. This would place an additional burden on the government's subsidy budget.
Key Statistics
- Rs 14 – Loss per litre on petrol
- Rs 18 – Loss per litre on diesel
- Rs 80,000 crore – Projected LPG under-recoveries by FY2027
- Rs 2.05–2.25 lakh crore – Projected fertiliser subsidy requirement
- Rs 1.71 lakh crore – Budgeted fertiliser subsidy
The government has budgeted Rs 1.71 lakh crore for fertiliser subsidies, but actual requirements are estimated between Rs 2.05 lakh crore and Rs 2.25 lakh crore, highlighting the fiscal challenges ahead. These figures underscore the delicate balance between protecting consumers from high fuel prices and ensuring the financial health of state-owned oil companies.
