No bailout package for oil companies right now, says Centre amid West Asia crisis

New Delhi: The Centre has ruled out any immediate bailout package for state run oil marketing companies (OMCs) even as they grapple with massive losses due to under-recoveries triggered by the ongoing West Asia crisis.

“There is no proposal for any support [package] to oil-marketing companies right now,” Sujata Sharma, Joint Secretary in the Union Petroleum Ministry, told media persons here on Monday.

The clarification comes amid mounting pressure on the state-run firms, which are incurring losses of up to Rs 1,000 crore per day after buying crude, gas, and LPG at higher international prices while selling petrol and diesel at unchanged two-year-old rates to shield consumers.

Union Petroleum Minister Hardeep Singh Puri had on Sunday highlighted the grim situation, stating that OMCs are staring at under-recoveries of ₹2 lakh crore, with losses projected to touch up to ₹1 lakh crore in the current quarter.

“OMCs are buying crude, gas and LPG at a higher cost, but to protect consumers, they are selling final products at a lower cost, leading to massive mounting losses,” Puri posted on social media.

He, however, emphasised that the companies have ensured uninterrupted energy imports and supply.

Prime Minister Narendra Modi addressing a public rally in Hyderabad on Sunday, urged citizens to reduce consumption of petrol and diesel, use public transport more, adopt car-pooling, and shift to electric vehicles to ease pressure on fuel supplies amid global uncertainties.

Clarifying the intent behind the appeal, C Senthil Rajan, Joint Secretary in the Ministry of Information and Broadcasting, said the Prime Minister’s message focused on efficient utilisation of resources.

“The idea is for optimum and efficient utilisation of available resources. It is not as if there is a shortage; there are adequate stocks, and arrangements are in place,” Rajan said.

Oil Secretary Neeraj Mittal sought to allay public concerns, stating there is no shortage of fuel and no plans for rationing.

“There is no rationing in place. It's not going to happen,” Mittal said while addressing the CII Annual Business Summit.

He added that the government has absorbed a substantial part of the price shock through fiscal measures, including excise duty cuts on petrol and diesel. 

“Government uses all sorts of tools,” Mittal said, noting that India has remained “a relative oasis of calm” compared to several other countries that have imposed fuel rationing and stricter demand curbs.