State-owned oil marketing companies (OMCs) incurred a cumulative loss of Rs 74,781 crore on the sale of petrol, diesel, and liquefied petroleum gas (LPG) below cost during the April-June 2026 quarter, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri announced on Thursday. The losses stemmed from a sharp rise in global crude oil prices triggered by the ongoing West Asia crisis, which elevated input costs for refiners.
Total under-recovery reaches Rs 2.1 lakh crore
Addressing a press conference, Puri revealed that the OMCs' total under-recovery—including losses from the fourth quarter of fiscal year 2026 and the first quarter of fiscal year 2027—stood at Rs 2.1 lakh crore. He emphasized that India's fiscal framework successfully shielded domestic consumers from the full impact of global crude volatility, with fuel being sold domestically at prices below cost during the period.
Although global crude prices have eased in recent weeks, the minister noted that the effects of the earlier surge persist because refiners are still processing crude purchased at significantly higher rates. Despite these financial pressures, India maintained steady domestic fuel supplies without any disruptions.
No dry-outs or shortages despite crisis
"Why did we do well and come out of the crisis without any closures and dry outs? In the entire period of March, April, May and June, there were no dry-outs," Puri stated. "By and large, there was no disruption, shortage or queues."
The minister contrasted this stability with sharp fuel price hikes observed globally. While India managed its domestic supply, petrol prices surged by 39.77 per cent in Pakistan, 36.66 per cent in Sri Lanka, 20 per cent in Nepal, and 42.69 per cent in Bangladesh. European nations also saw significant increases: 17.74 per cent in France, 19.05 per cent in Germany, and 18.39 per cent in Italy.
India prepares for future volatility
Addressing potential future crude price volatility, Puri said India is proactively expanding its storage capabilities and international partnerships. "Worried about that? No, my answer to that self-inflicted question is I'm not worried about it, but I have to prepare for it, stocking up as prices are low, increasing my storage space to intensifying our outreach to our bilateral partners, all that will go hand in hand," he explained.
The government is pushing forward with massive domestic refining expansions to secure long-term energy independence. A review of capital expenditure across the ministry and public sector units confirmed that multiple advanced-stage projects will be implemented over the next 6 to 12 months.
Refining capacity to reach 300 million metric tonnes per annum
"This will bring our refining capacity to 300 million metric tonnes per annum. This is a noteworthy and remarkable figure," Puri said. Part of this expansion includes a new 9 million metric tonnes per annum project featuring a 2.4 million metric tonnes per annum petrochemical capacity.
"This is the first greenfield refinery we are establishing after a gap of 10 years. The last greenfield refinery was commissioned in 2016, which was the Paradip Refinery," the minister added. "In the global context, I would regard this as a state-of-the-art refinery with absolutely unique technology and highly efficient output."
Global refining landscape shifting
This infrastructure growth comes at a time when traditional Western refining powers are scaling back operations. "The United States has not had a greenfield refinery for the last 50 years. There has been no new greenfield refinery in the United States," Puri noted. "As far as Europe is concerned, my recollection is that it is losing refining capacity at the rate of 200,000 barrels per day."
According to the minister, this structural shift will redraw the map of global energy trade by the end of the decade. "If you look at the broader global picture, we can see that by 2030 there are likely to be three or four major refining hubs in the world. India is certainly emerging as, and is probably already, the third-largest refining hub in the world," Puri said. "So, I see smaller, less competitive refineries closing down. Global trade in hydrocarbons will be determined and very largely influenced by those countries that have significant refining capacity."
