ICRA has projected that LPG under-recoveries for oil marketing companies (OMCs) in India could escalate to ₹80,000 crore by FY2027, primarily due to supply disruptions and elevated global prices stemming from the ongoing conflict in West Asia. Prashant Vasisht, Senior Vice President at ICRA, highlighted that stable pump prices for auto fuels, despite high crude oil prices, are squeezing OMC profitability. Current crude prices are estimated between $120-125 per barrel, resulting in negative marketing margins of ₹14 per litre for petrol and ₹18 per litre for diesel. Although Indian refiners have increased LPG production and sourced supplies from the US and Australia, under-recoveries remain high. The crisis has also raised input costs across various sectors, including fertilizers, chemicals, and city gas distribution (CGD). ICRA anticipates that the subsidy requirement for fertilizers could range from ₹2.05 trillion to ₹2.25 trillion for FY2027, necessitating enhanced government allocation from the budgeted ₹1.71 trillion. The overall outlook for sectors like fuel retailing and basic chemicals remains negative due to persistent cost pressures.