India's Oil Companies Bleed USD105M Daily

(MENAFN) India's state-run oil companies are hemorrhaging funds at an alarming rate as the ripple effects of a Middle East energy crisis batter one of the world's largest fuel markets, a senior government official warned Tuesday — raising urgent questions about how much longer the country can shield its citizens from soaring global prices.

Indian Oil Minister Hardeep Singh Puri, speaking at an industry event in New Delhi, acknowledged that while fuel supply chains remain stable, the financial strain on national oil firms has reached a breaking point.

"How long will the oil companies be able to take it? Frankly, that's something that worries me," said Puri, while responding to a question.

According to government figures, India's oil marketing companies are absorbing losses of nearly 10 billion Indian rupees ($104.54 million) per day — a deliberate policy decision to ensure the "burden of global astronomical prices is not passed to the Indian citizens."

The government has defended the strategy, maintaining that India stands among a handful of nations where petroleum prices have "held steady through this period of global volatility even after more than 70 days since the conflict started."

But Puri cautioned that the current trajectory is financially untenable. Noting that there have been times "when the oil companies have done exceptionally well till recently," Puri said Tuesday that "the rate at which we are going, this one quarter of losses may wipe out the entire profit after tax of last year."

"Coming back to the question, how long can this happen? At some stage, the government will have to take a view on that," he said.

On the reserves front, officials confirmed India holds 60 days of crude oil, 60 days of natural gas, and 45 days of liquefied petroleum gas (LPG) in rolling stock — a buffer that provides limited breathing room.

The crisis strikes at a critical vulnerability: India sources nearly 50% of its energy needs from the Middle East, a supply chain worth $180 billion in 2024. In a significant policy shift last month, New Delhi announced the resumption of oil purchases from Iran for the first time in seven years — a pragmatic pivot driven by the ongoing regional conflict.

The pressure has reached the highest levels of government. Prime Minister Narendra Modi on Sunday urged citizens to voluntarily cut fuel consumption, including through measures such as working from home.

The crisis traces back to February 28, when joint US and Israeli strikes against Iran triggered a cascade of retaliatory attacks from Tehran against Israel and US allies across the Gulf. The fallout has severely disrupted the Strait of Hormuz — the narrow but vital waterway through which roughly 20% of all global oil shipments pass — sending energy markets into sustained turmoil.

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