The ongoing tension in West Asia and skyrocketing prices of crude oil have broken the back of India’s top 3 government oil companies. It is estimated that in the first quarter of the current financial year (2026-27), Indian Oil (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) may collectively suffer a huge loss of Rs 47,700 crore. The situation is that crude oil has become expensive in the international market, but the retail prices of petrol and diesel in the country have not increased in that proportion. Due to this, the pressure on oil companies is at its peak.
The coffers of companies are about to become empty.
According to the reports of brokerage firms Nomura and JM Financial, these companies have suffered a major setback due to buying crude oil at expensive prices and selling petrol and diesel at cheap prices. In the first quarter alone, HPCL has been estimated to incur a huge loss of Rs 17,300 crore, IOCL Rs 17,200 crore and BPCL Rs 13,200 crore. Till the last quarter, these companies were making some modest profit per liter, but now this margin has fallen to a huge loss of Rs 20 to 23 per liter. This crisis has deepened due to the weakness of the rupee and increase in refinery costs. Among these three, HPCL’s situation is said to be the worst because it has the highest retail marketing exposure.
LPG is also increasing tension
The impact of inflation is not limited to petrol and diesel only, but LPG has also increased the problems of oil companies manifold. LPG prices have increased significantly globally due to supply chain disruption in the Middle East and increase in prices by Saudi Arabia. According to the data, companies are facing a loss of Rs 560 per gas cylinder, which was only Rs 77 per cylinder in the last quarter. JM Financial estimates that this loss (under-recovery) on LPG alone can increase rapidly to the level of Rs 25,000 crore.
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