Crude Price Surge: India's Oil Marketing Companies Face Financial Strains

India's state-run oil marketing companies (OMCs) are currently able to manage auto-fuel costs as Brent crude hovers around $95 a barrel, but sustained prices above $100 could lead to higher petrol and diesel prices.

According to industry sources, OMCs can broadly absorb crude oil prices in the $85-$90 a barrel range, operating close to break-even at these levels. However, if crude prices remain elevated for an extended period, OMC losses could widen significantly.

OMCs currently incur around ₹200 in under-recovery per domestic LPG cylinder, with cumulative losses exceeding ₹59,000 crore by July 31. The loss-making is largely due to the government's subsidized domestic LPG sales.