ICRA’s analysis puts the shortfall at about ₹8 per litre on petrol, ₹9 per litre on diesel and roughly ₹300 on each domestic LPG cylinder, translating into a combined daily loss of around ₹530 crore for the sector.
Senior Vice‑President and co‑group head of corporate sector ratings at ICRA, Prashant Vashisht, linked the under‑recoveries to the escalation of the conflict in West Asia, which has disrupted key oil supply routes and pushed crude‑oil prices sharply higher.
The price shock, he said, has not only squeezed margins on refined fuels but also amplified pressures on LPG, a product whose global supply is dominated by a handful of producers – chiefly the United States, Australia and Saudi Arabia.
Vashisht noted that the United States alone produces about 27 million tonnes of LPG, a volume made possible by the shale‑gas boom, but higher freight costs for importing U.S. LPG are adding further strain to Indian market dynamics.
The combined effect of rising crude costs, limited LPG availability and increased logistics expenses is forcing Indian oil marketers to sell fuel at prices that do not fully cover their procurement costs, eroding profitability across the sector.