Oil firms losing ₹600cr daily despite recent price hikes
25 May 2026

India's state-run oil companies are facing severe financial pressure due to high global crude oil prices.

Despite several increases in retail fuel prices this month, the companies are still losing nearly ₹600 crore every day, Reuters reported citing government officials.

The latest price revision announced earlier today was the fourth hike this month, aimed at bridging the gap between domestic retail rates and international crude prices.

Retailers still facing significant losses
Financial impact

The recent price hikes have only partially offset losses incurred by retailers such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.

State-owned retailers are still losing nearly ₹600 crore every day as higher crude procurement costs continue to outpace gains from pump price revisions.

This financial strain has been worsened by continued volatility in the global energy market due to geopolitical tensions and concerns over supply disruptions from major oil-producing regions.

Centre's revenue losses mounting
Fiscal strain

The government's finances have also been affected by cuts in excise duty on petrol and diesel to shield consumers from soaring fuel inflation.

Officials said the Centre is losing nearly ₹14,000 crore every month in revenue due to lower excise collections on auto fuels.

This further complicates the balancing act for policymakers who are trying to contain inflationary pressures without severely affecting the financial health of oil marketing companies.

Fiscal deficit pressure could increase
Economic impact

Industry experts have warned that the combined effect of higher import bills and lower fuel tax collections could widen pressure on the fiscal deficit if crude prices stay high for a long time.

Rising oil prices usually widen India's current account deficit and stoke imported inflation, especially through transport and logistics costs.

Brokerages and energy analysts have also warned that sustained high crude prices could hurt profitability of oil marketing companies despite recent retail price hikes.

Refining margins have improved for some Indian companies
Market response

Despite the challenges, refining margins for some Indian companies have improved due to strong export demand for petroleum products.

However, analysts say gains in refining operations don't always fully offset losses incurred in domestic fuel retailing.

The government has not yet indicated whether more fuel price hikes or additional fiscal measures are under consideration.

Officials have suggested that the current situation is being closely monitored amid continuing uncertainty in international energy markets.