The central government has extended support to OMCs by forgoing around Rs 1.23 lakh crore in revenue over 78 days through the excise duty cut on petrol and diesel, instead of passing the burden on to consumers.
The aid comes amid a global energy disruption triggered by the West Asia war and blockade of key maritime shipping route Strait of Hormuz. The disruption has pushed fuel prices higher. However, despite this many of India's major OMCs have not passed the cost increase on to consumers.
As of May 2026, OMC under-recoveries had eased to below Rs 600 crore per day following the fourth fuel price hike, according to Petroleum Secretary Sujata Sharma. The under-recoveries stood at 1,000 crore per day before the government introduced fuel price hikes.
ALSO READ: OMC Daily Under-Recoveries Shrink To Rs 600 Crore On Repeated Fuel Price Hikes
The Centre introduced a fuel price hike of Rs 2.7 on an average in the last week of May. A move that was expected to help oil marketing companies cut their overall losses by at least 44%.
The four phased revisions - on May 15, 19, 23 and 25 - took Delhi petrol from Rs 94.77 to Rs 102.12 and diesel from Rs 87.67 to Rs 95.20.
Speaking amid the ongoing West Asia crisis that has disrupted crude oil and LNG imports for nearly one-and-a-half months, Sharma said India's energy imports remain "unaffected".
ALSO READ: India's Fuel Price Hike Smallest Among Major Non-Subsidising Economies: Govt Sources
Under-recoveries had reduced to nearly 750 crore per day by May 18, 2026. Sharma had then clarified that the Centre was not considering any bailout package for state-run fuel retailers.
On LPG distribution, Sharma had outlined that oil companies have managed to maintain regular supplies despite global disruptions.
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