New Delhi, May 28: Public sector oil marketing companies (OMCs) are currently absorbing losses of around Rs 550 crore per day on the sale of petrol, diesel and LPG under government direction, as authorities seek to shield domestic consumers from the sharp rise in global energy prices triggered by the West Asia crisis, the Petroleum Ministry said on Wednesday.
The ministry said PSU oil firms have refrained from passing on the full increase in international fuel prices, ensuring price stability for households, two-wheeler users and farmers.
However, the ministry clarified that this pricing cushion is strictly meant for retail consumers and does not apply to industrial procurement, where fuel prices continue to reflect international market rates.
The government warned that industrial consumers shifting purchases from bulk channels to retail outlets are exploiting subsidised retail pricing, creating artificial pressure on fuel pumps and triggering local shortages despite adequate national supply.
According to the ministry, private oil marketing companies have witnessed nearly a 38 per cent decline in diesel offtake this month across retail and bulk segments due to higher pricing, with volumes migrating to PSU retail outlets. In addition, PSU bulk customer volumes have declined by about 29 per cent, further indicating a shift toward retail channels.
Taking a serious view of the situation, the government has directed industry associations to sensitise members about the consequences of diversion and misuse of retail fuel supplies.
States and Union Territories have also been urged to form special enforcement squads and initiate strict action against hoarding, black marketing, unauthorised stocking and diversion of petroleum products under the provisions of the Essential Commodities Act.
The ministry stressed that India faces no fuel supply constraints, citing the country’s 258.1 million tonnes per annum refining capacity across 22 operational refineries. Domestic petroleum consumption stood at 243.2 million tonnes in FY26, while exports of refined products reached 61.5 million tonnes, reinforcing India’s position among the world’s leading fuel exporters.
The government said it remains closely engaged with the evolving international situation and asserted that India’s refining capacity, PSU OMC operations and Centre-State coordination continue to underpin the country’s energy security framework. Citizens have been urged to rely on official communication and ignore rumours regarding fuel shortages.
