NEW DELHI: The government has no plans to provide any financial relief to oil marketing companies for selling petrol, diesel and aviation turbine fuel (ATF) below cost. Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, while speaking to the press in a daily briefing, said that as of now there is no proposal before the government to support oil marketing companies for their losses. "There is no proposal before the government to support oil marketing companies (for their losses)," said Sujata Sharma.
Sharma further added that despite the disruption in the supply of crude oil and gas due to the war in West Asia, there has been no increase in the retail prices of petrol and diesel, as well as domestic LPG. She noted that only bulk or industrial diesel, as well as commercial LPG—the one used by hotels and restaurants—have been increased. "Every effort has been made to protect the consumers (by not raising retail prices). Consumer interest has been kept in mind when deciding on the revision," she said.
Due to disruptions in the Strait of Hormuz, oil marketing companies have increased the price of domestic LPG by Rs 60 per 14.2-kg cylinder on March 7. On May 1, they increased the prices of commercial LPG—the one used in hotels and restaurants—by Rs 993 to a record high of Rs 3,071.50 per 19-kg cylinder. The rates for 5-kg FTL or market-priced LPG cylinders were hiked from Rs 549 to Rs 810.50 per bottle. The price of aviation turbine fuel (ATF) for international airlines was hiked by $76.55 per kilolitre, or 5.33%, to $1,511.86 per kl. Also, prices of bulk diesel, used by industrial users like telecom signal towers, were increased from about Rs 137 per litre to over Rs 149 a litre. These rates compare to the Rs 87.62 a litre price of diesel available at petrol pumps.
Meanwhile, the prices of petrol and diesel have remained unchanged after the government extended a four-year freeze on revisions in retail rates despite rising crude oil prices. There are reports that rating agency ICRA has estimated under-recoveries of Rs 25–28 per litre on petrol and diesel.
Due to high ATF prices, for the first time in more than two decades, oil marketing companies have begun posting losses on jet fuel (ATF) since last month as they have only partially passed on the increase to customers.
Meanwhile, LPG consumption fell sharply by 16% in April due to supply disruptions linked to the West Asia conflict. LPG consumption stood at 2.2 million tonnes in April, 16.16% lower than 2.62 million tonnes consumed in the same period last year. The consumption was 10.5% lower than the 2.45 million tonnes of LPG sales in April 2024.
