OMCs stare at significant losses on domestic LPG sales; govt likely to take a fiscal hit on compensating OMCs
Published on 01/04/2026 12:50 PM
OMCs stare at significant losses on domestic LPG sales; govt likely to take a fiscal hit on compensating OMCs India faces major fiscal strain as war in West Asia drives LPG under recoveries of 380 rupees per cylinder, OMC losses may hit 40484 crore, fuel tax cuts deepen revenue lossBy Sapna Das April 1, 2026, 12:50:21 PM IST (Published)2 Min ReadThe Finance Ministry is likely to see a significant fiscal hit on India’s oil maths going haywire due to the war in West Asia.
As things stand today, the Oil Marketing Companies are incurring under-recoveries of ₹380/domestic LPG cylinder, the Ministry of Petroleum said. According to the Ministry, this may translate into cumulative losses of approximately ₹40,484 cr by the end of May this fiscal.
Last fiscal year, the finance ministry compensated OMCs to the tune of ₹30,000 cr out of total losses of ₹60,000 cr incurred by the OMCs on the sale of subsidised domestic LPG, the Petroleum Ministry said.
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OMCs have increased the commercial LPG cylinder price for the second time since the war began but refrained from doing so for domestic LPG.
The Petroleum Ministry said, "The April 1 price increase in Commercial cylinder price is due to a 44% surge in the Saudi Contract Price: from $542/MT in March to $780/MT for April, as 20-30% of global LPG supplies are stuck in the Strait of Hormuz."
On March 27, the finance ministry cut the excise on the sale of petrol and diesel by ₹10/litre each. This is likely to cause a net revenue loss of ₹5500 cr to the exchequer every fortnight, CBIC had said, after factoring in the revenue gain of ₹1500 cr every fortnight on the levy of export duty on ATF and diesel.
The export duties will be reviewed every 14 days.Continue Reading(Edited by : Juviraj Anchil)Tagsoil marketing companies OMCs