Mideast energy shock impact on Indian oil companies 'worrying,' says official

Indian oil companies are incurring heavy losses due to the fallout of the Middle East energy shock, said a top Indian official on Tuesday, expressing concern over how long they could bear it.

The fuel supply management side is stable in the South Asian nation, said Indian Oil Minister Hardeep Singh Puri addressing an industry event in New Delhi.

“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.

The Indian government maintains that it is among the few countries where petroleum prices have “held steady through this period of global volatility even after more than 70 days since the conflict started.”

According to the government, India’s oil marketing companies have absorbed losses of close to 10 billion Indian rupees ($104.54 million) a day, so that the “burden of global astronomical prices is not passed to the Indian citizens.”

Noting that there have been times “when the oil companies have done exceptionally well till recently,” Puri said on Tuesday “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.

The remarks by Puri came amid tensions in the Middle East that continue to drive up global energy prices.

Indian officials also said the country has 60 days of crude oil, 60 days of natural gas and 45 days of liquefied petroleum gas (LPG) rolling stock.

India procures almost 50% of its energy supplies, worth $180 billion in 2024, from the Middle East. India last month announced that it has resumed oil purchases from Iran, the first time in seven years, amid the ongoing conflict in the Middle East.

Prime Minister Narendra Modi on Sunday had urged people to reduce fuel consumption through measures such as working from home.

Regional tensions have escalated since the US and Israel launched strikes against Iran on Feb. 28, triggering retaliation from Tehran against Israel as well as US allies in the Gulf.

The Strait of Hormuz, a key global waterway through which roughly 20% of global oil shipments pass, has also faced severe disruption due to the conflict.