PSU oil companies absorbing Rs 550 crore daily losses on fuel sales

The Petroleum Ministry said PSU oil companies are absorbing Rs 550 crore in daily losses by not fully passing global fuel price hikes to consumers. The government also warned against diversion of retail fuel supplies and assured adequate petrol and diesel availability nationwide

New Delhi: Under the direction of the government, the public sector oil companies are currently absorbing losses on the sale of petrol, diesel, and LPG to the tune of Rs 550 crore per day as they have refrained from passing on the full increase in global prices to protect domestic consumers, the Ministry of Petroleum and Natural Gas said on Wednesday.

This cushion, which has been put in place due to the disruption caused by the West Asia crisis, is intended for the retail consumers: the households, the two-wheeler commuters, and the farmers at the pump. It is not extended to industrial procurement, where pricing tracks international actuals as a matter of standing policy, the ministry said in a statement.

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It warned that industrial consumers who divert their purchases from the industrial channel to the retail pump capture this cushion at the cost of the ordinary citizen. They also concentrate demand at the pump in a way that produces local shortages where none would otherwise exist, it highlighted.

It has been observed that private oil marketing companies are experiencing a decline of approximately 38 per cent in diesel offtake during the current month, across both retail outlets and bulk customers, due to higher rates fixed by them, it said. This volume is shifting entirely to PSU oil marketing retail outlets. Coupled with this, PSU bulk customer volumes have also recorded a decline of approximately 29 per cent, which is also migrating to retail outlets.

The government, taking a serious view of this, has asked the industry associations to make their members aware of both the principle and the consequences of violations.

It has requested states/UTs to form special squads and take strict action against malpractice of bulk consumers and hoarders taking supplies meant for retail consumers, black marketing, unauthorised stocking, and diversion of petroleum products under relevant provisions of the Essential Commodities Act and Control orders issued thereunder.

“The country has more than adequate supplies of petrol and diesel to meet every domestic need, retail and industrial alike. India is the world’s fourth largest refiner, with an installed capacity of 258.1 million tonnes per annum across 22 operational refineries. Domestic consumption was 243.2 million tonnes in FY 2025-26; petroleum product exports were 61.5 million tonnes in the same year, making India one of the largest exporters of refined products globally. There is no supply issue of any kind,” the Petroleum Ministry statement said.

Noting that the government remains fully seized of the international situation, the statement said that India’s refining strength, the disciplined operation of the public sector OMCs and the active coordination across the Centre, States and industry constitute the working architecture of energy security during this period. Citizens are requested to rely on official communication and to disregard rumours that mistake an arbitrage problem for a supply problem, it added.