Indian OMCs Face 30,000 Cr Monthly Underrecoveries

State-owned oil marketing companies in India, including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, are incurring underrecoveries of about 30,000 crore rupees monthly to maintain stable retail prices for petrol, diesel and cooking gas amid disruptions from the West Asia conflict.

The crisis, which escalated after United States and Israeli strikes on Iran on February 28, has spiked global crude oil prices from around 70 dollars per barrel to over 120 dollars, with peaks near 144 dollars. Shipping through the Strait of Hormuz, a vital route for India's imports of 88 percent of its crude oil, most liquefied petroleum gas and significant natural gas, has been disrupted, leading to higher freight costs, insurance premiums and emergency sourcing expenses. Retail prices have remained unchanged since February 28 at 94.77 rupees per litre for petrol and 87.67 rupees for diesel, while domestic LPG cylinder prices rose by 60 rupees in March.

Sujata Sharma, joint secretary in the Ministry of Petroleum and Natural Gas, stated during a briefing that oil companies are facing heavy losses despite government efforts to shield consumers. "Our oil...