Union Petroleum Minister Hardeep Singh Puri announced that fuel prices cannot be reduced immediately when global crude oil rates decline, as reported by The Times of India. Addressing a press conference in Uttar Pradesh's Sonbhadra district, Puri explained that oil marketing companies (OMCs) are currently processing crude oil bought at higher prices, and any benefit from softer international crude rates would take time to reflect in retail fuel prices. The Minister stated that when crude purchased at lower prices reaches them, there is a possibility of a reduction in fuel prices, though the normalization process will require time given the complex shipping routes and traffic patterns through the Strait of Hormuz. In his latest press conference, Puri confirmed that OMCs are evaluating crude oil bought at higher prices and the possibility of passing the benefits of softer crude rates, though it will take time to reflect in gasoline and diesel retail prices.
Puri revealed that the central government has absorbed significant financial impact from the war in West Asia that began in February this year, as reported by The Times of India. The Minister stated that the Centre lost ₹12,000 crore by absorbing the impact on oil companies, while none of the states reduced their revenue by charging lower excise duty on higher fuel prices. He emphasized that the central government must continue operations while oil companies need to survive, highlighting the government's commitment to maintaining energy security. Puri noted that oil marketing companies are currently losing around ₹1,000 crore per day, but the government has ensured that consumers are shielded from the full impact of rising crude prices. According to the latest data, OMCs are presently losing up to ₹1,000 crore per day due to keeping fuel rates steady and bearing the burden of higher crude oil prices.
Market experts have provided detailed insights into how falling crude oil prices will impact oil marketing companies. Swarnendu Bhushan, Co-Head of Research at PL Capital, noted that brent dropping below $80 per barrel has provided a positive respite for oil marketing companies (OMCs), though Q1FY27 is expected to weigh sharply on profitability. He highlighted that the government continues to bear a significant revenue impact of ₹1,700 billion per year from the excise cut, with the overhang of a rollback in excise duty cuts of ₹10 per litre remaining a key pressure point for OMCs. Bhushan emphasized that while near-term sentiment has improved, Q1FY27 losses and continued uncertainty around the excise duty rollback suggest that OMC profitability is likely to remain under pressure through FY27.
Despite recent crude oil price declines, fuel prices in India remain elevated compared to pre-conflict levels. Retail petrol prices in Delhi currently stand at ₹102.12 per litre, while diesel prices are at ₹95.20 per litre, compared to the pre-conflict FY26 benchmark levels of ₹94.80 per litre and ₹87.70 per litre, respectively, as reported by Mint. According to Sugandha Sachdeva, founder of SS WealthStreet, as of June 15, 2026, under-recoveries on petrol had declined to around ₹3 per litre from nearly the peak under-recovery of ₹15–30 per litre on petrol and diesel as Brent crude eased towards $82 per barrel and is now sub $80 per barrel. She explained that OMCs had refrained from fully passing on the earlier spike in crude oil prices to consumers for an extended period, resulting in pressure on marketing margins, with recent fuel price hikes aimed at partly restoring profitability.
Currently, Brent crude futures rose 66 cents to $80.38 per barrel and US WTI crude advanced 94 cents to $77.54 per barrel on Friday, as reported by Mint. Crude oil prices have witnessed a steep correction, plunging nearly 40% from the peak of about $120 per barrel reached after tensions in West Asia escalated. The decline follows an interim agreement between the United States and Iran, which is expected to reopen the Strait of Hormuz, relax sanctions on Tehran, and pave the way for increased Iranian oil exports to global markets. Market data suggested shipping activity slowed after an earlier surge in tanker movements, with no outbound vessels seen leaving the Persian Gulf on Friday morning, while nearly 10 million barrels of crude were observed transiting or positioned near the strait on Thursday.
