State-owned fuel retailers are losing close to Rs 3 per litre on selling diesel while the profit on petrol has trimmed due to recent firming up in international oil prices, said recent reports citing industry officials.

The Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), have voluntarily not changed petrol, diesel and cooking gas (LPG) prices for almost two years now.

This has resulted in losses when input cost was higher and profits when raw material prices were lower.

These entities control roughly 90 per cent of India’s fuel market.

International oil prices, against which domestic rates are benchmarked as India is 85 per cent dependent on imports to meet its oil needs, had softened late last year but firmed up again in the second half of January.

The US crude oil production fell in January and isn’t expected to grow at all this year, the Energy Information Administration (EIA) said in its latest Short Term Energy Outlook. The Agency also lowered its US oil demand forecast to 20.39 million barrels per day from its previous forecast of 20.45 million barrels per day.

The cold snap that hit parts of the United States in January took crude oil production offline, causing daily production to fall to just 12.6 million barrels per day—down from 13.3 million bpd, the EIA said.

The EIA expects US oil production to return in February to levels just under the record, it expects production to drop slightly for the remainder of the year.

Recently, Prime Minister Narendra Modi at the inauguration of the India Energy Week 2024 talked about the estimates of doubling of the nation’s energy demand by 2045, and said oil demands will be doubled from the current 19 million barrels.

Highlighting the efforts to ensure affordable fuel, PM Modi said that despite adverse global factors, India is among the few nations where petrol prices have come down and 100 per cent electricity coverage was achieved by electrifying crores of houses.

“India is not just meeting its needs but is also determining the global direction”, the Prime Minister added.