India Holds Fuel Prices as OMCs Lose ₹30,000 Crore Monthly

India's state-run oil marketing companies have accumulated roughly ₹30,000 crore in monthly losses since mid-March 2026, absorbing the impact of surging global crude prices triggered by the West Asia conflict and the Strait of Hormuz blockade. Despite Brent crude spiking to $120 per barrel — a more than 50 percent surge in input costs — petrol and diesel prices across major Indian cities remained unchanged through May 9, with petrol at Rs 94.77 and diesel at Rs 87.67 in New Delhi.

The Government of India cut excise duties on petrol and diesel by Rs 10 per litre each, forgoing approximately Rs 14,000 crore in monthly revenue to cushion consumers. Officials said the government is absorbing roughly Rs 24 per litre for petrol and Rs 30 per litre for diesel. Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum have maintained uninterrupted fuel supplies without raising retail prices, incurring daily under-recoveries of Rs 30 to Rs 100 per litre.

Joint Secretary Sujata Sharma told an inter-ministerial briefing on May 8 that crude prices had surged to $120 a barrel and that the Strait of Hormuz disruption was the largest ever. She said the priority has been preventing price increases, and the government is conducting surprise inspections and issuing notices to curb hoarding and black marketing. No rationing or shortage of petrol and diesel has occurred.

With losses projected to exceed Rs 50,000 crore for the current quarter, officials face a difficult political choice: raise pump prices by 20 to 30 percent and risk wider inflation, or continue absorbing roughly Rs 1,000 crore per day in fiscal drain. A potential price hike before May 15 remains under consideration as geopolitical tensions, including U.S. pressure on Iran over the Strait of Hormuz blockade, continue to shape India's import costs.