Surging Oil Prices Put Pressure on Petrol and Diesel

Surging crude oil prices have raised concerns over the possibility of another increase in petrol and diesel prices in India. However, domestic retail fuel prices have remained unchanged despite the sharp rise in international crude prices. According to ICRA, oil marketing companies are currently facing estimated losses of around ₹530 crore per day on petrol, diesel and domestic LPG sales. The Indian crude basket rose to $117.4 per barrel on September 21, compared with an average of around $66 per barrel in 2025-26.

The pressure has increased due to supply disruptions and geopolitical tensions in West Asia, including disruptions to key oil supply routes. ICRA estimates negative marketing margins of about ₹8 per litre on petrol and ₹9 per litre on diesel, while the under-recovery on a domestic LPG cylinder is around ₹300 in September. If elevated crude prices persist without corresponding retail price revisions or additional government support, the financial pressure on oil marketing companies could increase further.