Public-sector oil-marketing companies (OMCs) are absorbing losses of nearly ₹550 crore per day by not passing the full impact of rising international crude prices to retail consumers amid disruptions triggered by the West Asia conflict, the Government said on Wednesday (May 27, 2026).

The issue figured prominently during the sixth meeting of the Informal Group of Ministers (IGoM) on West Asia, chaired by Defence Minister Rajnath Singh at Kartavya Bhawan-2 in New Delhi.

The Government said the OMCs were absorbing losses to protect retail consumers from the volatility in global energy markets.

Further, authorities also flagged concerns over industrial users allegedly diverting purchases to retail outlets to take advantage of the protected fuel prices.

Officials noted instances of black marketing by some dealers, prompting intensified enforcement measures by the Ministry, oil companies and State Governments.

“Industrial consumers who divert their purchases from the industrial channel to the retail pump capture this cushion at the cost of the ordinary citizen. They also concentrate demand at the pump in a way that produces local shortages where none would otherwise exist,” read a govt statement.

According to the government, the country’s privately-owned OMCs have observed an approximately 38% decline in sales of diesel in the ongoing month — from both retail and bulk consumers — owing to their higher prices.

Thus, shifting their demand to public-sector OMCs having comparatively lower prices. Further, according to the government, PSU bulk consumer volumes have also declined approximately 29% - as they migrate to retail outlets. For context, bulk and retail diesel have a price differential of about ₹40 per litre.

Defence Minister urges citizens to refrain from panic-buying

In a post on X after the meeting, Mr. Singh said the supply situation in the country remains normal and appealed to citizens not to indulge in panic buying of petrol, diesel or LPG cylinders.

The Government underlined that India’s fuel supply position remains secure despite global disruptions. India currently has an installed refining capacity of 258.1 million tonnes per annum (MTPA) against domestic consumption of 243.2 million tonnes in the last financial year. The country also exports nearly 61.5 million tonnes of petroleum products annually, indicating no supply gap.