Oil marketing companies (OMCs) are incurring marketing losses of about ₹8 per litre on petrol and ₹9 per litre on diesel, as domestic retail prices remain unchanged amid a sharp rise in crude oil prices, according to rating agency ICRA. The agency estimates that OMCs are losing roughly ₹530 crore daily, a figure highlighted by ICRA Senior Vice‑President and Co‑Group Head, Corporate Sector Ratings, Prashant Vasisht, who noted the impact of recent geopolitical tensions on supply routes.

ICRA also estimated that under‑recoveries on domestic LPG have reached around ₹300 per cylinder in September 2026, down from an estimated loss of about ₹500 per cylinder in the first quarter of 2026‑27. The agency warned that LPG under‑recoveries could rise further if international prices remain elevated without a corresponding increase in domestic selling prices or additional government compensation.

The losses have emerged following a spike in crude prices amid West Asia conflict and disruptions to the vital Strait of Hormuz. ICRA said the rise was driven by the renewed US‑Iran conflict, the shutdown of Saudi Arabia's East‑West pipeline and heightened Houthi activities in the Red Sea, all of which have led to a spike in crude prices in recent weeks.

The Indian crude basket rose to $117.4 per barrel on September 21, 2026, from an average of around $66 per barrel in 2025‑26. ICRA said elevated crude prices coupled with unchanged domestic fuel prices would put pressure on the profitability and cash flows of OMCs and could also increase their short‑term borrowings to meet higher working capital requirements.

The Special Additional Excise Duty (SAED) on diesel and aviation turbine fuel (ATF) was introduced from March 27, 2026, and subsequently extended to petrol as product prices increased. For domestic supplies, SAED is adjusted in the refinery transfer price, reducing the effective product cost for the marketing divisions of OMCs. The SAED has remained at ₹20 per litre on diesel and ₹15 per litre on ATF since September 16, 2026, reflecting strong product cracks, ICRA said.