India’s fuel retailers are incurring significant financial losses due to government efforts to keep petrol and diesel prices below prevailing market rates, a senior official said on Thursday.
Sujata Sharma, Joint Secretary in India’s oil ministry, disclosed that retailers are losing about 100 Indian rupees ($1.06) per litre on diesel and roughly 20 rupees per litre on petrol in the domestic market.
The losses stem from a policy decision to shield consumers from high global energy prices, particularly amid ongoing volatility in international oil markets.
India last adjusted retail fuel prices in April 2021, and authorities have since maintained controlled pricing despite fluctuations in crude oil costs.
Sharma noted that there are currently no plans to increase fuel prices, underscoring the government’s priority to ease the financial burden on households and businesses.
This approach, however, has transferred the cost pressure onto state-run and private fuel retailers, squeezing their margins and profitability.
Industry analysts warn that sustained under-recoveries could affect the financial health of oil marketing companies if global prices remain elevated.
The situation highlights the delicate balance India faces between protecting consumers and ensuring the sustainability of its energy sector.
Fuel demand in India, one of the world’s largest energy consumers, remains strong, further amplifying the financial strain on retailers.
The government’s stance suggests that consumer relief will continue to take precedence, even as retailers grapple with mounting revenue shortfalls.