Amid PM Modi's Austerity Appeal, Govt Says Omcs Absorb ₹1,000 Crore Daily Losses To Hold Fuel Prices Steady Amid Surge

(MENAFN- Live Mint) The Ministry of Defence has informed in a meeting of Informal Group of Ministers (IGoM) that since the crisis in West Asia started, India's oil marketing companies have absorbed losses of close to ₹1,000 crore a day to hold fuel prices steady amid a global surge. It informed that under-recoveries are running to nearly ₹2 lakh crore in Q1 '26.

The meeting was chaired by Defence Minister Rajnath Singh to take stock of the latest developments in the conflict and how India's readiness could be bolster to ensure its minimum effect on the people.

The meeting was attended by Minister of Chemicals & Fertilizers Jagat Prakash Nadda, Minister of Petroleum and Natural Gas Hardeep Singh Puri, Minister of Railways, Information and Broadcasting, Electronics & Information Technology Ashwini Vaishnaw, Minister of Parliamentary Affairs Kiren Rijiju, Minister of Civil Aviation Kinjarapu Rammohan Naidu, Minister of Ports, Shipping and Waterways Sarbananda Sonowal; and Minister of State (Independent Charge) of the Ministry of Science & Technology Jitendra Singh.

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.5 QUESTIONS1How much are India's oil marketing companies losing daily due to absorbing fuel price surges?⌵

India's oil marketing companies (OMCs) are absorbing losses of close to ₹1,000 crore daily to maintain steady fuel prices amidst a global surge. These under-recoveries are projected to reach nearly ₹2 lakh crore in Q1 '26.

2What is India's current fuel storage situation amid the West Asia crisis?⌵

India has no shortage of petroleum products, with 60 days of crude oil, 60 days of natural gas, and 45 days of LPG rolling stock. Foreign exchange reserves are also a comfortable $703 billion.

3What steps has PM Modi suggested to reduce fuel consumption in India?⌵

PM Modi has urged citizens to reduce fuel usage by using metro rail, carpooling, electric vehicles, and working from home. He also suggested postponing non-urgent foreign travel and gold purchases.

4Will the government provide a bailout package to oil marketing companies facing losses?⌵

No, there is no proposal for a bailout package or fiscal support to oil marketing companies (OMCs) despite their mounting losses. OMCs are currently absorbing losses by selling products at lower domestic prices.

5Why is PM Modi urging austerity measures amidst the West Asia crisis?⌵

The West Asia crisis has disrupted global supply chains and pushed up international oil prices, impacting India's economy. PM Modi's appeal aims to reduce the nation's burden by promoting fuel conservation and reducing consumption of imported goods.

Also Read | India overhauls crude oil, natural gas royalty rules in biggest upstream reform

On India's fuel storage, the ministry informed that the country has no shortage of any petroleum product.

“India has 60 days of crude oil, 60 days of Natural Gas and 45 days of LPG rolling stock. The foreign exchange reserves stand at a comfortable $703 billion. India is the world's third largest oil refiner and fourth largest exporter of petroleum products, exporting to over 150 countries and is meeting domestic demand in full,” it said.

Asserting that fuel conservation can ease nation's burden amid surge in fuel prices across the world, the ministry highlighted the prime minister's appeal to the nation on Sunday, May 10, in Hyderabad.

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“Prime Minister Shri Narendra Modi's appeal to the people for collective participation to help the country deal with global economic disruptions, supply chain challenges and rising prices caused by international conflicts has, thus, emphasised prudence in usage of petroleum products and reducing wasteful consumption, so that the fiscal burden on the nation is reduced in the present and into the future,” it said.

PM Narendra Modi called for the nation to postpone gold purchases and non-urgent foreign travel for at least a year to strengthen the economy. He suggested using metro rail services in cities, carpooling, use of electric vehicles (EVs), utilising railway services for parcel movement, and working from home for a year to help India save fuel due to crisis in West Asia.

“We got into work-from-home, virtual meetings, video conferencing, and many other methods during Covid-19. We got habituated to them. The need of the hour is to resume those methods. During a global crisis, keeping the country above all else, we have to take resolutions,” he said.

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