New Delhi [India], September 23 : Oil marketing companies (OMCs) are facing negative marketing margins of Rs 8 per litre on petrol and Rs 9 per litre on diesel, while losses on domestic LPG have reached around Rs 300 per cylinder in September, rating agency ICRA said in a release on Wednesday.
There have been negative margins and LPG under-recoveries as crude oil prices surged in recent weeks while domestic retail prices of petrol, diesel and LPG remained unchanged, ICRA said. At these levels, the daily loss to OMCs is estimated at around Rs 530 crore.
Brent crude has remained volatile in recent weeks amid heightened geopolitical tensions and uncertainty over global oil supplies. The swings in international crude prices have kept pressure on fuel markets and raised uncertainty for oil marketing companies.
“The escalation of the West Asian conflict and disruptions to key oil supply routes have led to a spike in crude prices in recent weeks, resulting in sizeable marketing losses and LPG under-recoveries for oil marketing companies,” ICRA Senior Vice-President and Co-Group Head, Corporate Sector Ratings Prashant Vasisht said.
The Indian crude basket rose to USD 117.4 per barrel on September 21, 2026, from an average of around USD 66 per barrel in 2025-26, amid escalating geopolitical tensions and supply disruptions in West Asia.
ICRA said elevated crude prices and unchanged domestic fuel prices would put pressure on the profitability and cash flows of OMCs and could increase their short-term borrowings to meet higher working capital requirements.
“The impact on OMCs’ earnings in 2026-27 will depend on crude prices, product cracks, retail price revisions and government support for LPG under-recoveries,” Vasisht said.
The pressure on LPG has also widened. ICRA said the cumulative negative LPG buffer stood at Rs 61,940 crore as of June 30, 2026. The estimated loss per domestic cylinder was around Rs 500 in the first quarter of 2026-27 and remained at around Rs 300 in September.
ICRA said LPG under-recoveries are likely to rise further if elevated international prices persist without a corresponding increase in domestic selling prices or additional government compensation. (ANI)
