Due to selling petrol and diesel at the current prices, they are losing Rs 14 per liter on petrol and Rs 18 per liter on diesel.
Despite the constant volatility and unexpected upward trends in crude oil prices, India's state-owned oil companies earned an average profit of Rs 116 crore per day during the first 9 months of the financial year 2025-26. After February 27 this year, due to the rapid increase in crude oil (crude petroleum) prices, the profits of these companies definitely decreased. But due to the limited time for profit erosion (about a month), the balance sheets of these oil companies did not suffer much erosion. Now, the situation has been completely different during the month of April.
At one point, crude oil had reached $155 per barrel, but after a few days it came down to $40-50. On Friday, sweet (low-carbon) Brent crude was selling at $110-111 per barrel, while high-carbon crude prices were at $109-110. This situation is completely different from the scenario before February 27. Then, crude oil prices were around $76 per barrel. The Indian government, in addition to the four public sector oil companies, also reduced excise duty on petrol and diesel by Rs 10-10 respectively on March 27 to protect the private oil companies from the adverse effects of the increase in international crude oil prices to some extent. Despite this, it has become a difficult task for these oil companies to make a profit from the new financial year.
The constituencies of oil companies claim that due to selling petrol and diesel at the current prices, they are losing Rs 14 per litre on petrol and Rs 18 per litre on diesel. For this reason, they are putting pressure on the government to increase the retail prices of petrol and diesel. The government has remained silent on this pressure so far, but in view of the prevailing situation, it has no other option but to increase the retail prices of petrol and diesel.
In the case of gas, by increasing the price of commercial LPG cylinders by about Rs 1,000, the government is making the catering and hospitality industry more dependent on electric induction furnaces. It is also ironic that if the central government increases the retail rates of petrol and diesel, the pocket of the common consumer will be burdened, but the income of the state governments through VAT will increase. Therefore, the strategy of the central government will be that before increasing the retail rates of petrol and diesel, it will put pressure on the state governments to also reduce the VAT rates applicable on the above-mentioned petro-products. By doing so, the financial burden on the common consumer will also be reduced to some extent and the increase in the rates of freight will also limit the rise in the prices of other consumer goods.
Overall, the situation that has arisen from Iran's blockade of the Strait of Hormuz and the blockade of the Gulf of Oman and the Red Sea by US military fleets is, for now, unlikely to be resolved soon. US President Donald Trump is threatening to resume bombing Iran. Iran is also promising to respond befittingly to any such aggression. This war is creating new economic problems for the rest of the world every day. It does not have a single influential leader who can play the role of an honest arbitrator. This is the real tragedy of our age.
