Despite falling crude oil prices in the international market, why is there no relief in the prices of petrol, diesel and LPG in India? Know complete information related to huge losses of OMCs, under-recovery, West Asia crisis and strategy of oil companies.
There has been a sharp decline in the prices of crude oil in the international market in recent times. Generally, in such a situation, people expect that petrol, diesel and LPG will be cheaper. But this time the picture is different. Experts believe that at present the oil companies themselves are trying to compensate for the huge losses, hence there is little possibility of consumers getting relief soon.
According to industry sources, government oil marketing companies (OMCs) are in no mood to cut retail fuel prices right now. During the conflict in West Asia, companies faced huge under-recoveries, which are yet to be compensated. Companies are also keeping an eye on the impact of the peace agreement and the stability of the global market.
Huge loss in May
According to the information, in May 2026, government oil companies were incurring a loss of up to Rs 1,000 crore per day on the sale of petrol, diesel and domestic LPG. Later, after the price of petrol and diesel increased by about Rs 7.5 per liter, this loss came down to Rs 500-600 crore per day. The total under-recovery between March and May 2026 is estimated at around Rs 1 lakh crore.
Pressure on LPG also increased
According to CRISIL Intelligence, Saudi Aramco contract prices increased by about 46 percent between February and June 2026. Due to this, the cost of domestic LPG cylinders also increased. Under-recovery on a domestic cylinder increased to Rs 651 during May 2026 in Delhi. However, the entire burden was not passed on to consumers and a large part was borne by the oil companies themselves.
Why are prices not decreasing?
Global oil supply was badly affected during the conflict in West Asia. Now many countries are storing excess crude oil to avoid any future geopolitical crisis. Due to this the demand remains and it may take time for the market to become completely normal.
Additionally, S&P Global Energy estimates that crude oil prices could range between $80 and $90 per barrel in the second half of 2026. In such a situation, instead of reducing prices, oil companies can focus more on reducing their financial pressure.
At present the indications are that despite crude oil being cheaper in the international market, there is little hope of immediate relief in the prices of petrol, diesel and LPG. Consumers may have to wait for the global market to completely stabilize for relief.