Indian oil marketing companies incurred a staggering loss of Rs 74,781 crore on the sale of petrol, diesel, and other fuels during the period of the West Asia crisis, Union Petroleum Minister Hardeep Singh Puri confirmed on Tuesday. The losses stemmed from the government's decision to keep retail fuel prices unchanged despite a sharp spike in international crude oil prices triggered by the conflict.
Losses Mounted as Retail Prices Held Steady
Addressing reporters, Puri explained that state-owned fuel retailers—Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd—absorbed the increase in input costs to shield consumers from price volatility. The crisis, which began in late 2023, saw Brent crude oil prices briefly crossing the $100 per barrel mark, leading to under-recoveries on every liter of fuel sold.
"The companies suffered a combined loss of Rs 74,781 crore on account of sale of petrol, diesel, and other petroleum products during the period of the West Asia crisis," Puri said. He noted that the government had asked the firms to maintain stable prices to prevent inflationary pressure on the economy.
Crude Prices Ease but Lag Effect Persists
Although international crude oil prices have moderated in recent months, Puri pointed out that oil companies are still processing crude oil purchased at elevated prices during the peak of the crisis. This lag effect means that the financial impact will continue to be felt for some time. "International crude prices have come down but companies are still processing crude they bought at the height of the West Asia crisis," he added.
The minister's remarks come as state-owned fuel retailers have started reporting their quarterly earnings, with many posting losses due to the price freeze. The government had earlier provided compensation for similar under-recoveries during the Russia-Ukraine war in 2022, but no such relief has been announced for the current crisis.
Impact on Oil Marketing Companies
The losses have strained the finances of the three major oil marketing companies. Indian Oil Corporation, the largest of the trio, reported a net loss of Rs 15,000 crore in the quarter ending March 2026, attributing it largely to the fuel price freeze. Bharat Petroleum and Hindustan Petroleum also posted significant losses, according to industry sources.
Analysts say that the cumulative loss of Rs 74,781 crore represents a major hit to the profitability of these firms, which had been recovering after the government allowed periodic price revisions in 2024. The crisis has also delayed planned capital expenditure on refinery upgrades and expansion projects.
Government's Stance on Fuel Prices
Puri emphasized that the government prioritized consumer welfare over corporate profits during the crisis. "Our first duty is to ensure that the common man does not suffer from price shocks," he said. The minister added that the situation is being monitored and that the government will take appropriate steps to support the oil companies if needed.
Meanwhile, opposition parties have criticized the government for not providing direct compensation to the oil marketing companies, arguing that the losses could weaken the public sector energy infrastructure. The government has not yet announced any compensation package, but sources indicate that a decision may be taken after a review of the companies' financial health.
