OMCs lost Rs 18.9/litre on diesel, ₹6 on petrol in Q1

New Delhi: State-run oil marketing companies (OMCs) lost ₹18.9 on every litre of diesel and ₹6 on every litre of petrol sold in the retail segment during the April-June quarter as domestic pump prices remained below international rates, according to estimates by ICICI Securities.

A year earlier, the companies had earned ₹8.2 per litre on diesel and ₹10.3 per litre on petrol. By comparison, retail margins in the June quarter of 2024 stood at ₹2.5 per litre on diesel and ₹4.4 per litre on petrol, the brokerage said.

The surge in international crude oil and refined fuel prices during the quarter was not fully reflected in domestic pump prices, pushing retail margins into negative territory.


Petroleum and natural gas minister Hardeep Singh Puri said on Thursday that OMCs incurred losses of about ₹75,000 crore during the quarter to June by selling petrol, diesel, liquefied petroleum gas and jet fuel below market rates.

At refinery gates, petrol and diesel are priced in line with international fuel prices. OMCs then add freight, marketing and distribution costs, dealer commissions and retail margins to arrive at pump prices.

When domestic pump prices do not rise in line with international fuel prices, retail margins are squeezed, as happened during the June quarter. Conversely, when international fuel prices decline but pump prices remain unchanged, retail margins expand.

Retail margins, therefore, fluctuate with international fuel price trends. Over the previous two financial years, petrol margins peaked at ₹12 per litre in the third quarter of 2024-25, while diesel margins reached a high of ₹8.2 per litre in the first quarter of 2025-26, according to ICICI Securities.

Following the outbreak of the Ukraine war in early 2022, which sent global oil prices soaring, OMCs moved away from regular retail price revisions in line with international markets. Pump prices have seen only limited revisions over the past four years, allowing companies to earn higher margins when global oil prices fall but exposing them to lower or even negative margins when international prices rise.