Hardeep Puri Flags Fiscal Strain: 'How Long OMCs Will Be Able To Take It, It Worries Me'
Union Minister Hardeep Singh Puri assured the CII Annual Business Summit that India faces no fuel shortage. He revealed that LPG production has been scaled up to 56,000 tonnes to ensure supply stability. However, the Minister flagged "fiscal strain" on oil companies as current global rates impact their profitability.
- Republic Business
- 3 min read
Union Petroleum and Natural Gas Minister Hardeep Singh Puri delivered a candid warning to industry leaders on Tuesday. Speaking at the CII Annual Business Summit, the Minister addressed the growing gap between global energy costs and domestic retail prices.
While Puri assured the nation that there is "no fuel shortage anywhere in the country," he signaled that the financial burden on state-run Oil Marketing Companies (OMCs) is reaching a critical threshold.
Fiscal Strain
The Minister highlighted that the prolonged conflict in West Asia is no longer just a supply-chain issue, but a major threat to the country’s fiscal health. "PM Narendra Modi has given a visionary statement, if this (war) continues we will have to take measures to contain fiscal strain," Puri told the summit.
The most striking part of the Minister's address was his concern for the balance sheets of oil majors like Indian Oil, BPCL, and HPCL. He revealed that the massive losses incurred today are eating into last year's successes. "How long OMCs will be able to take it, it worries me. All the profits earned last year is being wiped out by the losses incurred due to the current rate."
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Strategic Reserves
To reassure the public, Puri detailed India’s current buffer, noting that the country is "navigating the most severe global energy disruption in recorded history" with a solid inventory.
Crude Oil & Natural Gas: India maintains 60 days of crude oil and natural gas reserves.
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LPG Stocks: The country has 45 days of LPG rolling stock.
Refinery Performance: Indian refineries are operating at high capacity, with some exceeding 100% utilization to meet demand.
Diversification of Imports
Puri emphasized that India has broken its over-reliance on the Strait of Hormuz by sourcing crude from 40 different countries, up from just 27 in previous years. "Non-Hormuz sourcing has risen to approximately 70% of crude imports," the Minister noted, adding that India is now securing cargoes from the U.S., Norway, Canada, Algeria, and Russia to offset Gulf disruptions.
The Minister made it clear that while industrial and manufacturing consumers might see managed reductions (receiving up to 80% of their average), domestic households are the "foremost priority."
LPG Production: Domestic output has been ramped up by 28%, reaching 56,000 tonnes per day.
Pricing Shield: Puri noted that the government has absorbed ₹74 per cylinder of the required price adjustment to keep costs affordable for PMUY beneficiaries.
"This is not the moment for rumour-mongering," Puri concluded. "India must stand united behind its energy warriors and the national interest."