Fuel Prices May Rise Further Despite Record Profits by Oil Companies

Key Highlights

• OMCs claim losses of ₹600 crore per day despite recent fuel price hikes.
• Petrol and diesel prices have increased by up to ₹7.50 per litre since May 15.
• Market estimates suggest a possible further increase of ₹9–10 per litre.
• IOC, BPCL and HPCL reported combined FY26 profits of ₹77,280 crore.
• Combined Q4 FY26 profit stood at ₹19,469.51 crore.
• Crude oil prices surged above $113 per barrel during March–April.
• Analysts seek greater transparency in under-recovery calculations.
• Concerns remain over the impact of higher fuel prices on inflation and consumers.

Fresh concerns are emerging over the possibility of another increase in petrol and diesel prices after state-run oil marketing companies (OMCs) claimed they are still incurring losses of nearly ₹600 crore per day, even after raising fuel prices by up to ₹7.50 per litre since May 15. According to industry estimates, if these “under-recoveries” continue, fuel prices could increase by another ₹9–10 per litre in the coming weeks.

The debate has intensified because India’s three largest oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — reported strong financial results during FY2025-26. Together, the three companies posted a combined annual profit of ₹77,280 crore, while fourth-quarter profits surged more than 40% compared to the same period last year. This has led analysts and consumer groups to question whether additional fuel price hikes are justified.

Oil companies maintain that rising crude oil prices, particularly following geopolitical tensions involving Iran, significantly increased their procurement costs. Average crude purchase prices reportedly jumped from $63 per barrel in January and $69 per barrel in February to around $113–114 per barrel during March and April. However, international crude prices have recently eased below $97 per barrel, prompting experts to demand greater transparency regarding the actual calculation of under-recoveries.

Energy sector observers argue that under-recovery figures often include losses from other petroleum products such as LPG and aviation turbine fuel (ATF), making it difficult to determine how much of the reported losses are directly linked to petrol and diesel sales. Critics also contend that consumers are not provided with a detailed cost breakdown, raising concerns about whether subsidies on products like cooking gas are indirectly being offset through higher fuel prices. As inflationary pressures remain a key concern for households and businesses, any further increase in fuel prices could have a wider impact on transportation costs and overall consumer spending.

Profit Snapshot (FY26)