India's Oil Companies Face ₹30,000 Crore Losses Amid Global Energy Crisis
India's oil companies bleed Rs 30,000 cr as fuel prices held steady despite global energy shock
The Economic Times
Image: The Economic Times
India's state-run oil marketing companies have incurred estimated losses of ₹30,000 crore (approximately $3.6 billion USD) since mid-March due to maintaining fuel prices despite a surge in global crude oil costs. The government intervened by cutting excise duties, preventing even larger losses as global tensions escalated.
- 01Indian oil companies have lost ₹30,000 crore due to steady fuel prices amid global crises.
- 02Excise duty cuts helped limit potential losses to ₹62,500 crore.
- 03Brent crude prices surged to nearly $144 per barrel during the conflict in West Asia.
- 04Daily losses averaged ₹600-700 crore for oil marketing companies in April.
- 05India's fuel prices remained unchanged while other countries saw significant increases.
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Since mid-March, India's state-run oil marketing companies—including Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL)—have faced estimated losses of ₹30,000 crore (approximately $3.6 billion USD) due to maintaining retail fuel prices despite a significant increase in global crude oil prices. The situation arose following the escalation of conflict in West Asia, particularly after the United States and Israel launched strikes on Iran, causing Brent crude prices to spike to nearly $144 per barrel. To mitigate losses, the Indian government reduced excise duties on petrol and diesel, which helped limit the potential losses to ₹62,500 crore. Despite the challenges, including daily under-recoveries of approximately ₹600-700 crore, the companies ensured uninterrupted fuel and LPG supplies across the country. This contrasts sharply with other countries, where fuel prices surged significantly, highlighting India's policy decision to prioritize consumer stability during this global energy shock.
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The sustained fuel prices have shielded consumers from immediate price hikes, but ongoing losses could affect future investments and operational stability of oil companies.
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