Petrol Under-Recoveries Fall 83% As OMC Financial Stress Reduces

India's state-run oil marketing companies (OMCs) such as Indian Oil, BPCL and HPCL have received some much-needed relief after a series of fuel price hikes helped reduce losses on petrol and diesel sales. The latest data shared by the Ministry of Petroleum and Natural Gas shows that under-recoveries on both fuels have fallen significantly over the past few weeks.

Petrol under-recoveries have dropped 83% to just ₹3 per litre from ₹24 per litre recorded on 1 April 2026. Diesel losses have also narrowed sharply, falling 75% to ₹27 per litre from ₹105 per litre during the same period.

What Has Been The Impact?

Under-recovery refers to the gap between what it costs oil companies to procure, refine and sell fuel and the price consumers actually pay at the pump. When that gap widens, companies effectively sell fuel at a loss.

The improvement follows four rounds of fuel price hikes carried out in May. The Centre raised fuel prices in phases on May 15, 19, 23 and 25, taking Delhi petrol prices from ₹94.77 per litre to ₹102.12 per litre, while diesel prices increased from ₹87.67 to ₹95.20 per litre. The final revision alone increased prices by an average of ₹2.7 per litre.

The impact has been visible in daily losses as well. OMC under-recoveries, which had touched nearly ₹1,000 crore per day at the peak of the crisis, fell to around ₹750 crore by 18 May and later dropped to about ₹600 crore per day after the latest fuel price revisions.

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What Helped Reduce The Pressure On Oil Companies?

The reduction in losses is not only because of higher fuel prices. The government has also provided substantial support by foregoing about ₹1.23 lakh crore in revenue through excise duty cuts on petrol and diesel. The move helped cushion consumers from the full impact of soaring global oil prices while preventing an even larger financial hit to oil retailers.

The pressure on OMCs intensified after disruptions in global energy markets linked to the West Asia conflict and the blockade of the Strait of Hormuz pushed crude oil prices higher.

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