The Centre has no proposal to provide financial support to state-run fuel retailers for the losses they incur on sales of diesel, petrol and jet fuel at below market rates, Sujata Sharma, a joint secretary in the petroleum ministry said on Monday.
“The government does not have any proposal that talks about supporting oil marketing companies,” Sharma said on May 4, even as state-run oil marketing companies (OMCs) continue to face pressure from elevated crude prices and unchanged retail fuel rates.
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Negative Margins
According to rating agency icra, OMCs are currently incurring negative marketing margins of around ₹14 per litre on petrol and ₹18 per litre on diesel at prevailing crude prices. The squeeze comes as Brent crude remains around $108 per barrel, while retail prices of petrol and diesel have not been revised since early April 2022.
Sharma said there has been no increase in retail prices of petrol and diesel, adding that “supplies have been impacted and there is tightness in the market.” Despite this, fuel retailers have not passed on higher costs to consumers, compressing their margins further.
Market Tightness
While retail prices of petrol, diesel, LPG and aviation turbine fuel (ATF) for domestic carriers remain unchanged, state-run retailers have increased prices selectively in other segments. Industrial LPG prices and ATF rates for foreign carriers have been raised, reflecting market-linked adjustments.
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The continued freeze on auto fuel prices amid high crude costs is weighing on the profitability of OMCs, even after recent reductions in excise duty. With no government support on the table, companies are expected to absorb the financial impact, as global oil markets remain tight and supply disruptions persist.
TOPICSCrude oilThis article was first uploaded on May four, twenty twenty-six, at forty-nine minutes past six in the evening.