State-run oil marketing companies (OMCs) are unlikely to immediately match Nayara Energy's sharp cuts in petrol and diesel prices despite softer global crude prices, as they continue to recover losses incurred during the recent West Asia conflict, sources told NDTV Profit.
According to sources, the three state-run fuel retailers are focused on recouping under-recoveries estimated at Rs 500–600 crore per day after absorbing the impact of elevated crude prices during the conflict.
The companies are also continuing to process higher-cost crude purchased when international oil prices briefly surged to around $100 a barrel. These inventories are expected to last another one to two months, delaying any benefit from the subsequent decline in crude prices, sources said.
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As a result, retail fuel price cuts are unlikely until lower-cost crude begins flowing through the refining system. State-run OMCs are also waiting for greater clarity on the direction of global crude prices amid lingering supply concerns and tightening oil inventories, according to sources.
The development comes after Nayara Energy reduced petrol prices by Rs 5 per litre and diesel prices by Rs 3 per litre. Sources noted that Nayara had previously been selling fuel at a premium to state-run OMCs, allowing it greater flexibility to lower prices.
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For now, consumers filling up at pumps operated by Indian Oil, Bharat Petroleum and Hindustan Petroleum are unlikely to see similar price reductions, with state-run retailers prioritising margin recovery before considering any revision in retail fuel prices, sources added.
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