Union Minister for Petroleum and Natural Gas Hardeep Singh Puri has stated that state-owned oil marketing companies could face a combined loss of up to Rs 1 lakh crore in a single quarter if retail prices of petrol, diesel, and other fuels are not adjusted to reflect rising international crude costs.
No supply-side constraints
Speaking at a press conference in New Delhi, Puri emphasized that India entered the ongoing West Asia crisis with robust inventories of crude oil and liquefied petroleum gas (LPG). "We have no supply-side problems," he asserted, adding that the country is well-prepared to meet domestic demand despite global uncertainties.
Impact on oil companies
The minister explained that the potential quarterly loss arises from the widening gap between international crude prices and the subsidized retail rates maintained by oil companies. "If we keep prices unchanged, the under-recovery will be massive," Puri warned. He noted that the government is closely monitoring the situation and will take appropriate measures to balance consumer interests with the financial health of oil firms.
Puri also highlighted that India has diversified its crude sources and built strategic reserves to mitigate supply disruptions. "Our refineries are operating at full capacity, and there is no shortage of fuel in the market," he said.
Market reactions
Analysts have pointed out that sustained high crude prices could force the government to either raise retail fuel prices or increase subsidies, both of which have fiscal implications. The minister, however, did not specify a timeline for any price revision.
Meanwhile, opposition parties have criticized the government for allowing oil companies to incur losses, arguing that it reflects poor planning. Puri dismissed these claims, reiterating that the government is committed to ensuring affordable fuel for citizens while maintaining the viability of public sector undertakings.
