OMCs Face Massive Losses of Rs 64 per Litre on ATF Amid Global Oil Crisis
Synopsis
In the wake of global oil price surges, oil marketing companies are grappling with substantial losses on aviation turbine fuel sales. Despite a recent price hike, the financial outlook remains grim, as analysts predict annual losses amounting to thousands of crores for major players.
Key Takeaways
OMCs are losing Rs 64 per litre on domestic ATF sales.
Recent ATF price hike is 8.56 percent .
Annualized losses for major OMCs could reach Rs 38,400 crore .
State-owned retailers dominate with over 90 percent market share.
Commercial LPG prices increased by 10 percent .
New Delhi, April 2 (NationPress) According to analysts, the government's strategic 8.5 percent increase in aviation turbine fuel (ATF) prices for domestic airlines may provide temporary relief to oil marketing companies (OMCs). Analysts from the global brokerage Nomura have projected that state-owned fuel retailers are still incurring substantial losses on ATF sales, driven by a surge in global oil prices due to ongoing conflicts.
Currently, it is estimated that OMCs are losing approximately Rs 64 per litre on domestic ATF sales, which corresponds to a marketing loss of around $109 per barrel.
Based on current pricing structures, the brokerage predicts annualized ATF losses of Rs 23,600 crore for Indian Oil Corporation, Rs 9,500 crore for Bharat Petroleum Corporation, and Rs 5,300 crore for Hindustan Petroleum Corporation.
The recent hike in ATF prices for domestic carriers, which rose by Rs 8,289.04 per kilolitre or 8.56 percent, has increased the cost from Rs 96,638.14 to Rs 1,04,927.18 per kilolitre.
While this increase is significant, it still falls short of what the fluctuations in global oil prices would suggest.
In contrast, prices for foreign carriers and non-scheduled, charter, and ad hoc operators were raised more dramatically by 114.5 percent, resulting in a new price of Rs 2,07,341.22 per kilolitre.
Although ATF comprises only 2-6 percent of total marketing volumes for OMCs, state-owned retailers maintain a dominant market share of over 90 percent, with around 65 percent of India's total ATF sales directed towards domestic airlines.
Additionally, rates for commercial LPG and premium petrol experienced increases on Wednesday amid stable energy market trends, although OMCs are still facing losses on domestic LPG cylinders.
Commercial LPG prices were elevated by approximately 10 percent.
Focusing on city gas distributors, Nomura highlighted Gujarat Gas as potentially the most adversely affected, citing its greater dependency on short-term and spot liquefied natural gas procurement, where prices have doubled since the conflict began on February 28, 2026.
Furthermore, the brokerage observed that the windfall tax does not apply to Reliance Industries' special economic zone refinery.
On Thursday, shares of state-owned oil marketing companies (OMCs) such as IOCL, BPCL, and HPCL saw a decline of up to 5 percent on the BSE during intra-day trading.
Point of View
It is imperative to recognize the significant financial strain that the oil marketing companies are facing amidst the volatile global oil landscape. While the government's price adjustments offer a temporary reprieve, the underlying issues of rising costs and market instability pose long-term challenges that require strategic solutions.
NationPress
3 Jul 2026
Frequently Asked Questions
What is the current loss for OMCs on ATF sales?
OMCs are currently experiencing a loss of approximately Rs 64 per litre on aviation turbine fuel sales.
How much did ATF prices increase recently?
ATF prices for domestic carriers were raised by Rs 8,289.04 per kilolitre, equating to an 8.56 percent increase.
Which companies are most impacted by ATF losses?
Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation are projected to incur significant annualized losses.
What percentage of the market do state-owned retailers hold?
State-owned retailers control over 90 percent of the ATF market in India.
What other price increases occurred recently?
Commercial LPG prices were raised by approximately 10 percent, alongside increases in premium petrol.
