India possesses a two-month fuel supply, offering a buffer against global energy flow disruptions, although state-run fuel retailers could face substantial losses if crude prices remain high and retail fuel prices are unchanged, according to Oil Minister Hardeep Singh Puri.
Speaking at CII’s Annual Business Summit, the minister stated India began the crisis with ample crude oil and LPG inventories and has since increased domestic LPG production to 54,000 tonnes per day from approximately 36,000 tonnes previously. He acknowledged the growing fiscal strain from maintaining stable retail fuel prices.
Information reaching TahirRihat.com suggests that the nation is well-prepared on the supply front, despite existing financial pressures on oil companies. The minister noted the necessity for an eventual assessment of how long retailers can sustain losses from selling petrol, diesel, and cooking gas LPG below cost, but declined to speculate about imminent rate increases.
Puri highlighted the financial challenges, stating that oil companies are collectively losing Rs 1,000 crore daily. The cumulative under-recoveries have climbed to nearly Rs 1.98 lakh crore, with a single quarter of losses potentially wiping out the sector’s annual profits.
Since the onset of the conflict in West Asia approximately ten weeks prior, state-owned oil marketing companies (OMCs) have provided uninterrupted supplies of petrol, diesel, and cooking gas LPG at rates below cost. This is in contrast to many global energy systems that have implemented rationing or passed on steep price increases. This commitment has resulted in record-high under-recoveries for the three OMCs: Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). The difference between the benchmark international cost and the retail selling price has widened, causing financial strain.
Puri detailed that the combined under-recovery on petrol, diesel, and cooking gas LPG is approximately Rs 1.98 lakh crore for the current quarter, while the actual loss is around Rs 1 lakh crore. These losses, he explained, could offset the profits that oil companies typically earn throughout an entire year.
While refraining from indicating whether these widening losses would lead to a price increase soon, Puri expressed concern about the sustainability of these losses for oil companies. (Puri stated, “How long will the oil companies be able to take it (losses)… frankly, that’s something that worries me”). He also noted that there has been no increase in petrol and diesel prices in the last four years.
Despite a 50 per cent increase in input crude oil prices, petrol and diesel prices remain at a two-year-old rate of Rs 94.77 a litre and Rs 87.67 per litre, respectively. Domestic cooking gas LPG prices were increased in March by Rs 60 per cylinder but remain significantly lower than the actual cost. Reports indicate that oil companies are currently incurring losses of Rs 14 per litre on petrol, Rs 42 a litre on diesel, and Rs 674 a litre on cooking gas LPG.
Puri characterized Prime Minister Narendra Modi’s call for moderation in energy consumption as a “visionary” long-term strategy rather than an indication of imminent restrictions. (Puri stated, “It’s not that any lockdown is going to happen tomorrow”). He added that continued disruptions due to the conflict in West Asia may necessitate measures to alleviate the fiscal strain.
He encouraged industries and households to accelerate the transition from LPG to piped natural gas where feasible, noting India’s expanding gas pipeline infrastructure and LNG availability. (Puri stated, “We have no shortage of pipe gas…It is cleaner, cheaper and helps us scale up the energy transition”).
The government is also reassessing strategic energy storage policies following the current crisis, which has exposed vulnerabilities in global supply chains. The minister suggested that India would need to develop larger reserves over time. (Puri pointed out, “The experience since February 2026 means you have to rethink everything”). Please note the source provided the wrong year, but the correct year has been used.
Prime Minister Modi recently urged for fuel conservation and reduced imports, citing pressures on India’s foreign exchange reserves from rising global energy prices. He also advocated for restraint in gold purchases to mitigate external vulnerabilities.
The minister said that India has effectively managed the situation, considering its substantial reliance on Gulf supplies before the conflict. (Puri stated, “There is absolutely no cause for anxiety”).
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.