Centre extends ₹1.23 lakh crore support to oil marketing companies
The Central Government has extended financial support worth ₹1.23 lakh crore to state-run Oil Marketing Companies (OMCs) to compensate for under-recoveries arising from the ongoing West Asia crisis, according to official sources.
The support package is aimed at helping public sector fuel retailers absorb the impact of elevated global crude oil prices and supply disruptions triggered by geopolitical tensions in West Asia. The move is intended to ensure that consumers are protected from sharp increases in fuel prices while maintaining the financial stability of oil marketing companies.
Sources said the assistance has been provided to offset losses incurred by OMCs due to the government's decision to shield consumers from the full impact of rising international energy prices. The support comes at a time when disruptions in the Strait of Hormuz and volatility in global oil markets have significantly increased the cost of crude oil, LPG, and other petroleum products.
State-owned oil retailers have been facing substantial under-recoveries on the sale of petrol, diesel, and domestic LPG as retail prices remained largely insulated from global market fluctuations. Industry estimates have indicated that OMCs were incurring heavy monthly losses due to higher import costs, increased freight charges, and insurance premiums linked to the West Asia conflict.
The government's intervention is expected to strengthen the balance sheets of public sector fuel companies and ensure uninterrupted fuel supplies across the country. Officials have repeatedly emphasized that India has adequate fuel stocks and contingency plans in place to address any supply disruptions arising from the regional crisis.
India, which imports a significant portion of its crude oil requirements, remains vulnerable to developments in West Asia, particularly around the Strait of Hormuz, a key global energy transit route. The government has undertaken multiple measures in recent months to cushion the economy from the impact of the crisis, including support for exporters, MSMEs, and energy companies.
The financial support package is expected to help OMCs continue supplying fuel at stable prices while safeguarding consumers and the broader economy from external shocks.
