Indian oil marketing companies (OMCs) are facing mounting pressure on their profitability after international crude oil prices surged above $100 per barrel following rising tensions between the US and Iran.
The sharp increase in global benchmark prices has reduced fuel marketing margins as domestic petrol and diesel rates remain unchanged.
Before the latest geopolitical escalation, Brent crude was trading in the range of $70-75 per barrel. However, as per a report by Business Standard, the recent surge has pushed OMCs into losses of around ₹5 per litre on petrol and ₹23 per litre on diesel.
The government had increased petrol and diesel prices by ₹7.35 per litre and ₹7.53 per litre, respectively, in May through four revisions.
Rising crude prices put OMC margins under pressure
Experts said crude prices could rise further if the conflict continues, especially as countries such as China increase purchases amid declining global inventories. Higher energy costs are a major concern for India, one of the world’s largest crude importers.
India imports nearly 90% of its crude oil requirements and around 50% of its natural gas needs. The country’s crude oil import bill rose 56.5% to $63.4 billion during April-July of FY27, despite import volumes remaining almost unchanged.
The overall oil and gas import bill also increased significantly during the period, adding pressure on India’s external finances.
With tensions in West Asia threatening supply stability, Indian refiners are working to diversify crude sourcing. Industry executives said companies are increasing dependence on suppliers such as Russia, Brazil and select African nations to ensure steady supplies and reduce exposure to geopolitical disruptions.
