After the Middle East war began, Indian state-owned oil marketing companies kept petrol, diesel and LPG supplies running with prices far below cost. But those under-recovery losses are building quickly, and analysts warn that Q1 fuel losses could erase entire fiscal-year earnings for the companies—unless pricing and reimbursement keep up.
Amid the West Asia crisis, India’s oil marketing companies have not fully passed oil price increases to consumers. To cushion them, the central government slashed excise rates, creating a sharp revenue hit. Reports say this decision is pressuring the government’s finances by roughly Rs 14,000 crore every month, even as OMCs remain focused on affordability.
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Soaring oil prices are forcing the government to revisit fuel pricing as state-run oil marketing companies grapple with mounting losses. While consumers have enjoyed stable LPG, petrol, diesel and ATF prices so far, the decision on whether to raise rates is still pending after elections. If crude volatility continues, price pressure may soon reach the pump.
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