Fuel Prices Unchanged Despite Record Profits: Govt & Oil Firms Reap ₹35 Lakh Crore
85% of Subsidies Funded Through Fuel Taxes as Consumers Pay High Prices
Crude oil prices have fallen to a four-year low, currently trading at $65.41 per barrel — a level last seen in April 2021, when prices touched $63.40. This sharp decline has significantly boosted refining margins, allowing oil companies to earn record-breaking profits.
According to rating agencies, oil marketing companies are currently earning ₹12–15 per litre on petrol and ₹6.12 per litre on diesel. Despite this substantial profit margin, fuel prices have remained unchanged for over a year.
Recently, there were speculations about a potential price cut. However, the central government increased excise duty by ₹2 per litre, providing companies with a reason to maintain current prices under the pretext of adjusted taxation. Oil companies have long cited losses to justify keeping fuel prices high — a claim increasingly challenged by the data.
In reality, out of seven major oil and gas companies, only Indian Oil Corporation (IOC) reported a minor loss in 2019–20. All others have consistently reported strong profits year after year.
Government Revenues from Fuel: ₹35 Lakh Crore in 5 Years
According to the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum, the central and state governments have collectively earned ₹35 lakh crore from petrol and diesel over the last five years.
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Central government earnings: ₹21.4 lakh crore (through excise duty, corporate dividends, and income tax)
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State government earnings: ₹13.6 lakh crore (via VAT and dividends)
In FY 2023–24 alone, seven leading oil companies reported a combined profit of ₹2.29 lakh crore. Between 2019–20 and 2023–24, their cumulative profit crossed ₹7 lakh crore. Reliance Industries Limited (RIL) topped the list, recording ₹2.86 lakh crore in profits, followed by ONGC.
Fuel Taxes Cover 85% of India’s Subsidy Bill
In 2024–25, India’s total subsidy burden is estimated at ₹8.51 lakh crore — ₹3.81 lakh crore from the Centre and ₹4.7 lakh crore from state governments. Remarkably, ₹7.2 lakh crore of this (around 85%) is being indirectly funded through fuel taxes.
Petrol and diesel remain among the most heavily taxed commodities:
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Central excise on petrol: ₹21.90 per litre
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Delhi state VAT on petrol: ₹15.39 per litre
Total tax on petrol: ₹37.30 per litre -
Central excise on diesel: ₹17.80 per litre
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Delhi state VAT on diesel: ₹12.83 per litre
Total tax on diesel: ₹30.63 per litre
The average monthly consumption per person in India is 2.80 litres of petrol and 6.32 litres of diesel — translating to an average monthly tax burden of ₹298 per person on fuel alone.
Despite falling crude prices and massive profits, consumers continue to bear the burden of high fuel prices — with little to no relief in sight.
