Petrol Price: Loss of Rs 80,000 thousand crore to oil market, loss of Rs 14 per liter on petrol, Rs 18 per liter on diesel: Report
Delhi. Despite the sharp rise in crude oil prices amid the West Asia crisis, due to stable retail prices of petroleum products, oil marketing companies are incurring a loss of Rs 14 and Rs 18 per liter on the sale of petrol and diesel respectively. This information was given in a report on Wednesday.
Rating agency ICRA said that if the price of crude oil remains at the level of $ 120-125 per barrel, then the marketing margins of petroleum companies will continue to remain negative, thereby affecting the profitability of the companies.
Prashant Vashishtha, senior vice-president, ICRA, said, “Stable auto fuel prices despite high crude oil prices are impacting the profit-making ability of petroleum companies.”
According to the report, apart from petrol and diesel, there is a possibility of huge ‘under-recovery’ i.e. loss on LPG, which can reach around Rs 80,000 crore in the financial year 2026-27. At the same time, fertilizer subsidy is estimated to increase to between Rs 2.05 lakh crore and Rs 2.25 lakh crore during this period, which is much higher than the budget estimate of Rs 1.71 lakh crore.
Icra said the availability of fuel, fertilizers and chemicals has been affected due to supply disruptions in the Strait of Hormuz, a sea route carrying about 20 percent of global oil and gas supplies. This has led to rising prices and increased cost pressure on oil refineries and marketing companies.
Before the Mideast crisis began in late February, crude oil prices were at $70-72 per barrel, which is more than $100 per barrel. According to the report, higher energy and raw material costs will impact the profitability of oil marketing, fertilizer, chemical and city gas distribution sectors as companies are not able to pass on the entire cost to consumers.
ICRA has kept the outlook for the crude oil refining sector as ‘stable’ but has ‘negative’ outlook for the fuel retailing, fertiliser, basic chemical and petrochemical sectors. In the fertilizer sector, there has been a sharp increase in the cost due to the increase in the prices of sulfur and ammonia and the cost of natural gas.
The price of urea pool has increased to about $19 per unit in April 2026, from about $13 before the crisis. The rating agency said that raw material inflation and lack of adequate revision in subsidies may affect the profits of phosphatic and potash (P&K) fertilizer companies. Weather-related risks can also limit farmers’ ability to absorb price increases.
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