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OMCs Face Rs 530 Crore Daily Loss Amid Crude Surge, Frozen Retail Prices: ICRA
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Moneycontrol•23-09-2026, 14:31
OMCs Face Rs 530 Crore Daily Loss Amid Crude Surge, Frozen Retail Prices: ICRA
- •State-run oil marketing companies (OMCs) are losing Rs 530 crore daily due to rising global crude oil prices while domestic retail prices remain unchanged, according to ICRA.
- •OMCs are experiencing negative marketing margins of Rs 8 per litre on petrol and Rs 9 per litre on diesel, alongside an under-recovery of Rs 300 per domestic LPG cylinder.
- •Escalating West Asian conflicts and disruptions to oil supply routes have caused crude prices to spike, leading to significant marketing losses and LPG under-recoveries for OMCs.
- •The Indian crude basket surged to $117.4 a barrel from an average of $66, driven by renewed US-Iran conflict, Saudi pipeline shutdown, and Houthi activities in the Red Sea.
- •Elevated crude prices and unchanged domestic fuel prices are expected to pressure OMCs' profitability, cash flows, and increase short-term borrowings for working capital.
Key Questions Answered
State-run oil marketing companies are losing Rs 530 crore a day because global crude prices have risen while domestic retail prices remain frozen.
Crude prices have spiked due to escalating West Asian tensions, a renewed US-Iran conflict, the shutdown of Saudi Arabia's East-West pipeline, and heightened Houthi activities in the Red Sea.
ICRA estimates that OMCs are generating negative marketing margins of Rs 8 a litre on petrol sales and Rs 9 a litre on diesel.
