Indian Oil Firms Face Daily Losses of ₹600 Crore Amid Rising Fuel Prices
After 4 rounds of fuel price hike, oil marketing companies ‘losing around Rs 600 cr per day: Sujata Sharma
Image: The Economic Times
Indian oil marketing companies are currently losing approximately ₹600 crore daily following four rounds of fuel price hikes totaling ₹7.5 per litre. The government's excise duty cuts, aimed at shielding consumers from rising prices due to the West Asia crisis, have resulted in a tax revenue loss of nearly ₹14,000 crore.
- 01The recent fuel price hikes have reduced losses for oil marketing companies to around ₹600 crore per day.
- 02The Indian government has lost nearly ₹14,000 crore in tax revenue due to excise duty cuts on petrol and diesel.
- 03Excise duty on both petrol and diesel was reduced by ₹10 per litre on March 27 to mitigate the impact of rising global crude prices.
- 04The West Asia crisis has significantly affected India's crude oil imports, with 40% of crude and 90% of LPG imports impacted.
- 05Despite government efforts, oil marketing companies continue to face financial challenges due to ongoing losses.
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Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, reported that state-owned oil marketing companies (OMCs) are currently incurring losses of approximately ₹600 crore per day following four rounds of fuel price hikes, which have increased prices by about ₹7.5 per litre. The Indian government has responded to rising global crude oil prices, exacerbated by the ongoing crisis in West Asia, by cutting excise duty on petrol and diesel by ₹10 per litre on March 27. This decision has led to a significant tax revenue loss of nearly ₹14,000 crore. Sharma noted that the crisis has impacted India's imports, with 40% of crude oil, 90% of liquefied petroleum gas (LPG), and 65% of natural gas imports affected. Despite these challenges, the government is making efforts to ensure a steady supply of petroleum products within the country, although the fiscal cost of the excise duty reduction remains high, and OMCs continue to struggle with financial losses.
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The financial struggles of oil marketing companies could lead to increased fuel prices for consumers, affecting transportation and goods prices across the country.
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