India’s oil marketing companies (OMCs) are losing ₹5 per litre on petrol and ₹23 per litre on diesel as the benchmark Brent crude crossed the $100 per barrel mark on Wednesday amid rising tensions between the United States (US) and Iran, reaching its highest level in more than six weeks. Brent crude prices hovered around the $70-75 per barrel mark prior to the start of the conflict at the end of February.
The spike in crude oil prices is expected to negatively impact the financial health of OMCs as fuel prices at the pump remain frozen despite soaring international crude prices. The government cumulatively raised petrol prices by ₹7.35 per litre and diesel rates by ₹7.53/l in May, across four instalments.
“With the escalation in hostilities between Iran and the US, Brent prices have crossed the $100 per barrel-mark today and the Indian crude basket is at approximately $109 per barrel,” said Prashant Vasisht, senior vice president and cogroup head, corporate ratings, Icra.
“At the average price for the month of September till date, marketing margins on petrol are [at a] negative ₹5 per litre and diesel at [a] negative ₹23 per litre… under recoveries on domestic LPG (liquified petroleum gas) are at ₹200 per cylinder,” he added.
Crude oil prices are expected to rise further if the current geopolitical situation persists, as certain countries, including China, ramp up oil purchases amid declining inventory levels, he added.
Elevated energy prices have particularly hit India, which is among the world’s largest crude oil importers. India imports almost 90 per cent of its total crude oil and 50 per cent of its natural gas requirements.
India’s crude oil import bill rose 56.5 per cent to $63.4 billion in the first four months (April-July) of the current financial year (2026-27), according to the oil ministry’s Petroleum Planning and Analysis Cell (PPAC). The spike in the import bill comes despite unchanged import volumes at 81.9 million tonnes (mt) during the April to July period of FY27, from 81.5 mt in the same period in the year-ago period. Meanwhile, the net oil and gas bill has increased 40.3 per cent to $57.8 billion during the period.
India also faces supply challenges with intensifying tensions in West Asia. Indian refiners plan to deepen diversification efforts with a heavy reliance on Russia, Brazil and certain African countries for energy procurement to meet domestic demand, a senior refinery executive told Business Standard.
