The ongoing conflict involving the US, Israel, and Iran has sent ripples through the global energy market, causing crude oil prices to skyrocket. Before the escalation began in late February, crude oil was trading at approximately $70 per barrel; however, prices have since surged to over $100, even touching $144 at one point. Despite this 50% increase in raw material costs, petrol and diesel prices in India have remained largely stable, leading to a massive financial hit for domestic oil marketing giants.
Official sources reveal that the three major public sector undertakings—Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL)—have incurred a combined loss of ₹30,000 crore. While the central government provided some relief by slashing excise duty on petrol and diesel by ₹10 per liter, which helped bring down the projected losses from an initial ₹62,500 crore, the companies continue to operate under significant financial strain to maintain an uninterrupted fuel supply across the country.
Beyond the direct cost of crude, the geopolitical instability has introduced secondary expenses that further squeeze profit margins. These include hiked insurance premiums for cargo and the necessity of rerouting transport ships to avoid conflict zones, adding to freight costs. By absorbing these global fluctuations rather than passing them on to consumers, Indian oil companies are playing a critical role in controlling domestic inflation, albeit at a heavy cost to their own balance sheets.
