Oil marketing companies (OMCs) have seen their daily losses reduce by ₹250 crore after the government hiked petrol and diesel prices by ₹3 per litre on May 16.
The combined under-recovery on LPG, petrol, and diesel now stands at approximately ₹750 crore per day, according to Sujata Sharma, Joint Secretary at the Union Petroleum Ministry.
She confirmed this at the bi-weekly inter-ministerial briefing on the situation in West Asia.
No bailout package being considered
In response to a question from The Hindu, Ms. Sharma categorically stated: “Bailout package for OMCs is still not on the table.”
This means the government expects OMCs to manage the remaining losses without direct financial support from the central budget.
From ₹1000 crore to ₹750 crore daily
On May 10, Union Petroleum Minister Hardeep Singh Puri had revealed that OMCs were losing around ₹1,000 crore per day.
These losses occurred because OMCs were buying crude oil, natural gas, and LPG at high international prices but shielding domestic consumers from the full impact by selling at lower rates.
With the ₹3 per litre hike in petrol and diesel, the daily loss burden has been trimmed by 25% – a reduction of ₹250 crore per day.
However, Ms. Sharma clarified that under-recovery continues. “Losses for the OMCs continue to occur. It is now estimated to be in the range of about ₹750 crore per day – that includes LPG, petrol and diesel combined,” she said.
Fuel consumption trends show mixed picture
India’s petrol consumption in April 2026 accelerated about 6.36% year-on-year to 3.67 million metric tonnes (MMT).
Diesel consumption remained nearly flat, increasing only 0.25% to 8.28 MMT.
LPG consumption, however, declined sharply by 16.2% to about 2.2 MMT. This drop was due to supply control measures imposed by the government on commercial LPG.
Commercial LPG supply gradually restored
As of date, India has restored commercial LPG allocation to 70% of the pre-crisis level. The government has been gradually easing the restrictions.
What this means for consumers
The ₹3 price hike has helped OMCs reduce daily losses by a quarter, but it has not eliminated the problem. If global crude oil prices remain elevated, consumers may face further price increases in the coming months.
For now, the government’s clear message is that no bailout is coming. OMCs will have to absorb the remaining ₹750 crore daily loss through their own margins or future price adjustments.
The situation remains fluid, with West Asian geopolitical developments continuing to influence global energy prices.
