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OMCs face Rs 530 crore daily losses as surge in crude prices outpaces fuel prices: ICRA
Sep-24-2026

Amid escalating geopolitical tensions and supply disruptions in West Asia spiking crude prices, the rating agency ICRA has said that state-run oil marketing companies (OMCs) are facing mounting losses on petrol and diesel sales as a surge in crude prices outpaces unchanged domestic fuel prices. Highlighting the magnitude of disparity between crude and fuel prices, ICRA said that the oil market companies are facing an estimated loss of Rs 530 crore on daily basis. It added that Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) are losing Rs 8 a litre on petrol, and Rs 9 on diesel, while under-recoveries on domestic liquefied petroleum gas (LPG) stood at about Rs 300 per cylinder.

Moreover, it noted that the price of the basket of crude oil India imports rose to $117.4 per barrel as on September 21, 2026, from the 2025-26 average of around $66 a barrel. The escalation of the West Asian conflict and disruptions to key oil supply routes have led to a surge in crude prices. It indicated that fuel marketers are facing pressure in spite of relatively strong refining margins as Singapore gross refining margins have stayed above $10 a barrel since the start of the West Asia crisis, supported by refinery outages, supply disruptions and inventory drawdowns. ICRA has described LPG as another growing source of pressure with cumulative negative LPG buffer reaching to Rs 61,940 crore as of June 30, after international LPG prices rose following supply disruptions in West Asia.

Besides, it said that the export levies introduced on diesel and aviation turbine fuel in March and subsequently extended to petrol have also remained elevated. The Special Additional Excise Duty on diesel stood at R 20 a litre and on ATF at Rs 15 a litre from September 16. ICRA expects higher crude and product prices to weigh on OMC profitability and cash flow, while increasing their short-term borrowing needs to fund working capital. Additionally, the impact on earnings in the 2026-27 financial year will depend on crude prices, product cracks, domestic retail price revisions and government support for LPG under-recoveries.

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