NEW DELHI
Oil marketing companies are facing mounting losses as higher crude oil prices have pushed their marketing margins on petrol and diesel into negative territory, while domestic LPG losses have also widened. Rating agency ICRA said OMCs are currently facing losses of Rs 8 per litre on petrol and Rs 9 per litre on diesel.
Losses on domestic LPG have reached around Rs 300 per cylinder in September, with the daily loss for OMCs estimated at about Rs 530 crore. ICRA attributed the pressure to a sharp rise in international crude prices while domestic retail prices of petrol, diesel and LPG remained unchanged.
The Indian crude basket rose to USD 117.4 per barrel on September 21, compared with an average of around USD 66 per barrel in 2025-26. ICRA said heightened geopolitical tensions and disruptions to key oil supply routes in West Asia have contributed to the surge and increased uncertainty in global oil markets.
“The escalation of the West Asian conflict and disruptions to key oil supply routes have led to a spike in crude prices in recent weeks, resulting in sizeable marketing losses and LPG under-recoveries for oil marketing companies,” ICRA Senior Vice-President and Co-Group Head, Corporate Sector Ratings Prashant Vasisht said.
ICRA said the cumulative negative LPG buffer stood at Rs 61,940 crore as of June 30, 2026. The estimated LPG loss was around Rs 500 per cylinder in the first quarter of 2026-27 and remained around Rs 300 in September. It warned that under-recoveries could rise further if international prices stay elevated without higher domestic prices or additional government compensation. The pressure could weigh further on profitability and cash flows, ICRA said, ahead.