India Fuel Stockpile: 60-Day Cover, OMC Loss Risk

What the government said and why it matters

India has enough fuel inventories to cover around two months and is not facing any supply-side concern, Union petroleum and natural gas minister Hardeep Singh Puri said in New Delhi on May 12. The statement comes amid disruptions to global energy flows and sustained worries around the Strait of Hormuz, a key shipping route for energy cargoes. While the government message focused on supply comfort, the minister also highlighted the mounting financial pressure on state-run oil marketing companies (OMCs) from holding retail prices steady.

The immediate issue for markets is the widening gap between international benchmark costs and domestic retail selling prices. Puri said OMCs are selling petrol, diesel and cooking gas LPG below cost, creating record under-recoveries. For investors tracking Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), the numbers indicate a sharp hit to quarterly profitability if current conditions persist.

Puri’s key comments at the CII summit

Speaking at the CII Annual Business Summit 2026, Puri said India began the crisis with “more than enough” crude oil and LPG inventories. He said the system is being monitored closely through continuous “war-room” reviews of supply and refining operations, with officials tracking the situation “hour by hour.”

But he also flagged the cost of maintaining unchanged retail prices during elevated crude prices. He said, “My oil companies are losing Rs 1,000 crore a day,” and warned that sustained high crude prices with no change in pump prices could translate into a loss of as much as Rs 100,000 crore in a single quarter. He added that, at some stage, an assessment would be needed on how long retailers can sustain below-cost sales, though he declined to speculate on the timing of any price increase.

Stockpiles: 60 days crude and LNG, 45 days LPG

Puri and other government briefings cited a comfortable inventory position. India currently holds around 60 days of crude oil supplies, 60 days of LNG inventories, and 45 days of LPG reserves. The government line has been consistent that there is “absolutely no cause for anxiety,” and that citizens should avoid panic buying.

A separate official briefing also cited India’s foreign exchange reserves at USD 703 billion, and reiterated that domestic demand is being met fully. The messaging draws a line between physical availability of fuels and the financial strain on OMC balance sheets.

Domestic LPG output has been ramped up

To support supply stability, Puri said domestic LPG production has been increased to about 54,000 tonnes per day from around 36,000 tonnes per day earlier. Another account referenced a higher band of about 55,000 to 56,000 tonnes per day from roughly 35,000 tonnes previously.

On demand, Puri said petrol consumption is up around 6%, while LPG demand has eased to about 75,000 tonnes per day from nearly 90,000 tonnes earlier. He said refiners have increased LPG production and supplemented supply through kerosene and biofuels.

Under-recoveries and losses: the core financial stress

Puri said the three OMCs are facing record under-recoveries, defined as the difference between benchmark international cost and the retail selling price. For the current quarter, he put combined under-recovery on petrol, diesel and LPG at about Rs 198,000 crore, while the actual loss is about Rs 100,000 crore.

He also said cumulative under-recoveries had climbed to nearly Rs 198,000 crore and that a single quarter loss of Rs 100,000 crore could wipe out the sector’s annual profits. A government source and other briefings also referenced daily losses in the band of about Rs 1,000 to Rs 1,200 crore.

Product-level losses: petrol, diesel and LPG below cost

Puri provided per-unit loss estimates that show where the pressure is concentrated. OMCs are currently losing about Rs 14 per litre on petrol and Rs 42 per litre on diesel. On LPG, the loss was stated at Rs 674 per cylinder (as cited in the report).

These losses are being absorbed while retail prices are being kept unchanged. The stated pump prices were Rs 94.77 per litre for petrol and Rs 87.67 per litre for diesel.

Why the Strait of Hormuz keeps coming up

Puri referenced concerns over the Strait of Hormuz, through which nearly 20% of global energy supplies transit. Another briefing said disruptions began on February 28 and had lasted 75 days so far.

Despite these risks, Puri said there were no shortages anywhere and that every petrol pump in the country has had petrol and diesel, while LPG supply is more than enough. The government has also said India continues to meet domestic demand in full.

No fuel price hike in four years, but sustainability is in focus

Puri said India has not raised fuel prices in the last four years despite global energy shocks and elevated crude prices. He framed this as a key difference compared with other markets that faced sharp price increases or supply availability issues.

At the same time, he acknowledged the growing fiscal stress from keeping retail prices unchanged. Government briefings noted there is currently no proposal for an immediate support package for OMCs, even as the losses mount.

What it means for listed OMCs: IOC, BPCL, HPCL

For IOC, BPCL and HPCL, the data points highlighted by the minister indicate a significant near-term earnings risk if retail pricing remains unchanged during sustained high crude prices. A quarterly loss estimate of around Rs 100,000 crore at the sector level is material in the context of annual profitability, as Puri explicitly said it could wipe out full-year profits.

Separately, a petroleum ministry official was quoted as saying the government has compensated OMCs in the past and that financial support may be provided at an appropriate time, while noting that a review is being carried out on all fronts including pricing. For investors, the key variables to watch remain the trajectory of crude prices, the duration of under-recoveries, and any policy decision on pricing or compensation.

Key figures at a glance

Conclusion

The government’s position is that India has ample fuel stocks and there is no risk of shortages in petrol, diesel or LPG, even amid disruptions around the Strait of Hormuz. But the same briefings underline a sharp financial strain on IOC, BPCL and HPCL, with daily losses around Rs 1,000 crore and quarterly losses estimated near Rs 100,000 crore if retail prices remain unchanged.

Officials said the situation is under continuous review through war-room monitoring, and a petroleum ministry source indicated the government is reviewing pricing and could consider support at an appropriate time, without announcing any immediate package.