Oil companies face up to Rs 1 lakh crore quarterly loss if fuel prices stay unchanged: Hardeep Singh Puri

Petroleum and Natural Gas Minister Hardeep Singh Puri on Tuesday warned that state-run oil marketing companies (OMCs) could incur losses of as much as Rs 1 lakh crore in a single quarter if global crude prices remain elevated while retail fuel prices are kept unchanged.

Addressing the CII Annual Business Summit, Puri highlighted the growing fiscal strain on the sector, stating that oil companies are currently losing around Rs 1,000 crore per day.

Cumulative under-recoveries on petrol, diesel, and domestic LPG have reached nearly Rs 1.98 lakh crore, with actual losses in the current quarter estimated at Rs 1 lakh crore — enough to wipe out the sector’s annual profits.

"We have no supply-side problems,” Puri said, emphasising that India entered the West Asia crisis with sufficient crude oil and LPG inventories.

Domestic LPG production has also been ramped up significantly to 54,000 tonnes per day from around 36,000 tonnes earlier.

The minister refrained from confirming an imminent hike in retail prices but noted that an assessment would eventually be needed on how long OMCs can continue absorbing losses.

“How long will the oil companies be able to take it… frankly, that’s something that worries me,” he said.

Petrol and diesel prices have remained unchanged for the last four years at Rs 94.77 per litre and Rs 87.67 per litre respectively, despite a roughly 50% surge in input costs.

Current losses stand at Rs 14 per litre on petrol, Rs 42 per litre on diesel, and Rs 674 per cylinder on LPG. Domestic LPG prices were last raised by Rs 60 per cylinder in March but remain well below cost.Since the outbreak of conflict in West Asia about 10 weeks ago, the three OMCs — IOC, BPCL, and HPCL — have maintained uninterrupted supplies without resorting to rationing or sharp price increases seen in many other countries.

The Minister described Prime Minister Narendra Modi’s recent call for energy conservation and reduced imports as a “visionary” long-term approach. He clarified that there are no plans for lockdowns or rationing.

“There is absolutely no cause for anxiety,” he said, adding that the government is encouraging a shift from LPG to piped natural gas (PNG), which is cleaner, cheaper, and supported by expanding pipeline infrastructure.India currently holds comfortable reserves — around 60 days of crude oil and LNG, and 45 days of LPG.

The minister said refiners have boosted domestic LPG output and supplemented supplies through kerosene and biofuels, reducing import dependence.

Puri also announced plans to expand India’s refining capacity to 320 million metric tonnes per annum by 2030 from the current 260 million, while pushing aggressively for increased domestic oil and gas exploration through policy changes and larger licensing rounds.