OMCs face Rs 530 crore daily losses as crude surges

State-run oil marketing firms are grappling with mounting losses as soaring crude prices outpace static domestic fuel prices, according to rating agency ICRA. Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum are each experiencing a Rs 8 per litre loss on petrol and a Rs 9 loss on diesel. Additionally, domestic liquefied petroleum gas (LPG) is under-recovering by about Rs 300 per cylinder, ICRA reported.

At these rates, OMCs are facing daily losses totaling Rs 530 crore, the agency added. The surge in crude prices can be attributed to escalating geopolitical tensions, supply disruptions in West Asia, and a series of events including renewed US-Iran conflict, the shutdown of Saudi Arabia's East-West pipeline, and heightened Houthi activities in the Red Sea.

ICRA senior vice president and co-group head of corporate sector ratings, Prashant Vasisht, stated in the report that crude oil prices for India's imports have risen to USD 117.4 per barrel from an average of around USD 66 per barrel in 2025-26. Despite relatively strong refining margins, the impact of higher crude and product prices is expected to weigh on OMC profitability and cash flow, increasing their short-term borrowing needs to cover working capital, ICRA said.