Oil PSUs Face ₹1 Lakh Crore Quarterly Loss; Puri Warns of Sector’s Profit Wipeout

 New Delhi: With the disruption of the supply chain due to the ongoing West Asia crisis, oil minister Hardeep Singh Puri on Tuesday warned that state-run fuel retailers may face losses of as much as Rs 1 lakh crore in a single quarter, if elevated crude prices persist and retail fuel prices remain unchanged. “With two months of fuel stockpiles, India faces no supply concerns despite disruptions to global energy flows,” the minister said.

Pointing at the losses incurred by oil marketing companies (OMCs), Puri also hinted about the fuel price hike, saying that some stage an assessment needs to be made on how long retailers can sustain losses from selling petrol, diesel and cooking gas LPG below cost. However, he straightaway refused to speculate if rates would be raised anytime soon.

“My oil companies are losing Rs 1,000 crore a day and under-recoveries have climbed to nearly Rs 1.98 lakh crore and that a single quarter of losses of Rs 1 lakh crore could wipe out the sector's annual profits. We have no supply-side problems,” the minister said at the CII's summit here, adding that India began the crisis with more than enough crude oil and LPG inventories and had since ramped up domestic LPG production to 54,000 tonnes per day from about 36,000 tonnes previously.

Puri also termed Prime Minister Narendra Modi’s call on Sunday for moderation in energy consumption as a ‘visionary’ long-term approach rather than signalling imminent restrictions. “It's not that any lockdown is going to happen tomorrow. But if this (disruption due to war in West Asia) continues, we have to start thinking about measures to lessen the fiscal strain,” he said.

Since the war broke out in West Asia 10 weeks ago, state-owned OMCs have ensured uninterrupted supplies of petrol, diesel and cooking gas LPG at rates that are way below the cost, unlike many global energy systems that imposed rationing or passed through steep price increases. “The government and OMCs had been conducting continuous ‘war-room’ reviews of supply and refining operations, with officials monitoring the situation hour by hour,” he said.

The Gulf war has resulted in the three OMCs such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) - running record-high under-recoveries (the difference between benchmark international cost and retail selling price).

Puri also said that the combined under-recovery on petrol, diesel and cooking gas LPG is about Rs 1.98 lakh crore for the current quarter, while the actual loss is about Rs 1 lakh crore. “The losses in one quarter are enough to wipe out profits that oil companies earn in the entire year. Without saying if widening losses could result in a price increase anytime soon. How long will the oil companies be able to take it (losses). Frankly, that's something that worries me,” he said.

The minister further said that there has been no increase in petrol and diesel prices in the last four years. “Today, we are in a situation where we don’t know how long the blockades or counter-blockades will continue. But I can tell you categorically that today, we are in a situation where, unlike other countries in the world which have had to either face problems in terms of availability and supply or where prices have gone rampant, we have had stable prices and supplies,” he said."

Despite a 50 per cent surge in input crude oil prices, petrol and diesel continue to be priced at a two-year-old rate of Rs 94.77 a litre and Rs 87.67 per litre, respectively. Domestic cooking gas LPG prices were raised in March by Rs 60 per cylinder, but they are still way lower than the actual cost. The oil companies are currently losing Rs 14 per litre on petrol, Rs 42 a litre on diesel and Rs 674 a litre on cooking gas LPG.

The minister also said that the government is also reassessing strategic energy storage policies after the current crisis exposed vulnerabilities in global supply chains and India would need to build larger reserves over time. “The experience since February 2026 means you have to rethink everything,” he said.