Oil minister Hardeep Singh Puri said July 2 that three firms incurred losses of ₹74,781 crore in June quarter.
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Pump prices
Puri was responding to questions on whether the government would cut pump prices after global crude rates retreated from their peaks following a temporary Iran-US truce.
Industry executives said a Rs 8 per litre increase in retail fuel prices, coupled with about Rs 10 per litre in tax reductions on petrol and diesel by the Centre, significantly cushioned the impact of the crude price spike due to the war. Higher LPG prices also helped companies to offset losses on cooking gas sales.
While the total quarterly losses of Rs 18,149 crore marks a sharp reversal from these companies’ combined net profits of Rs 16,184 crore a year earlier, it reflects only a fraction of the government’s projection.
ET BureauThe wide divergence between the actual losses and the government’s estimate underscores the political sensitivity around fuel prices, said industry executives. Raising pump prices or even resisting demands for price cuts when crude eases is politically difficult. As a result, the government often adopts a more pessimistic narrative on oil companies’ finances to build public acceptance for higher retail prices, the executives said.
“It’s about political communication,” one executive said.
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Another executive said the government’s messaging shifted noticeably in May after state elections. During the early weeks of the conflict, when elections were underway in some states, officials largely avoided highlighting losses at oil companies. Once the elections got over, the emphasis on companies’ financial stress got more pronounced.
Ahead of the fuel price increases, Sujata Sharma, joint secretary in the oil ministry, repeatedly said at press briefings that oil marketing companies were losing about ₹1,000 crore a day. Oil ministry officials also argued that losses in the June quarter could wipe out the companies’ profits for FY26. Indian Oil, BPCL, and HPCL had reported combined profitS of ₹77,280 crore last fiscal year.