- India’s oil marketing companies may face losses up to Rs 1.2 lakh crore in Q1 FY27 due to crude price rise
- Under-recoveries could reach Rs 2 lakh crore, with domestic LPG sales causing nearly half the burden
- Losses per LPG cylinder have risen to around Rs 704 as cooking gas is sold below cost
India's oil marketing companies (OMCs) are staring at massive losses of up to Rs 1.2 lakh crore in the first quarter of FY27 as the sharp spike in global crude oil prices, triggered by escalating tensions in West Asia, squeezes fuel retailers and refiners.
Government sources told NDTV Profit that the projected losses in just one quarter could wipe out nearly the entire profit earned by state-run OMCs in FY26.
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Under-recoveries are estimated to touch nearly Rs 2 lakh crore during the quarter, with domestic LPG sales accounting for almost half the burden.
According to sources, losses on every LPG cylinder have surged to around Rs 704 as companies continue selling cooking gas below cost.
Despite mounting pressure on balance sheets, the government currently has no formula-based mechanism to automatically raise retail fuel prices, indicating that petrol, diesel and LPG prices may remain largely insulated from global volatility for now.
Officials said the Finance Ministry is prepared to step in with financial support “if and when required,” though there are no immediate plans to rationalise fuel prices.
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At the same time, the Centre is working on measures to reduce long-term dependence on imported fuel.
Government sources told NDTV Profit, that efforts are underway to ramp up domestic crude oil and gas production, while the shift from LPG to piped natural gas (PNG) is gaining momentum.
City gas distribution companies have also been encouraged to accelerate PNG network expansion across urban centres.
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