Fuel price shield under pressure?

Manoj Yadav mumbai

India has managed to keep petrol and diesel prices relatively stable despite a sharp jump in global crude oil prices, but experts believe this situation may not remain sustainable for long. Geopolitical tensions, rising crude prices, depreciating Indian Rupee and growing fuel demand are increasing pressure on the country’s energy system. India currently imports nearly 89% of its crude oil needs, making the country highly dependent on international markets. 

Although fuel prices at petrol pumps have remained largely unchanged, oil companies are reportedly facing heavy financial pressure. According to estimates, state-run oil marketing companies (OMCs) absorbed combined losses of nearly ₹2,400 crore daily for a certain period because retail prices did not fully match import costs. Under-recoveries are estimated at around ₹20 per litre for petrol and nearly ₹100 per litre for diesel. 

The biggest trigger behind this pressure has been the sharp rise in global crude prices after the West Asia conflict that began in February 2026. Despite importing most of its crude oil, India’s fuel prices remain lower than many developed countries, including Germany, France, and the United Kingdom. 

Analysts believe that keeping prices artificially low for too long may increase the country’s fiscal burden and foreign exchange pressure. Experts now believe India may eventually need a gradual and carefully planned fuel price revision to protect the financial health of oil companies and ensure long-term energy security.