Oil Companies Banked ₹116 Crore Daily Despite Crude Price Swings in FY26

War-driven volatility masks steady earnings; government tightens export controls amid price fluctuations

Daily Windfall from Steady Crude

India's four leading oil companies pocketed ₹1.37 lakh crore in combined profits during the first nine months of the 2025-26 financial year—a haul that breaks down to ₹116 crore every single day. The figure is particularly striking given the geopolitical turbulence that sent global crude markets into a tailspin in recent weeks.

The numbers tell a counterintuitive story. While international crude prices have gyrated wildly—swinging from pandemic-era lows to four-year highs in just two months—India's oil sector has managed to maintain steady profitability. The secret lies in the average crude price during most of FY26: a modest $71 per barrel, the lowest level since the Covid year of 2020-21.

Crude's Dramatic Climb

The picture shifted sharply on February 28, 2026, when geopolitical tensions between Iran and the US erupted into armed conflict. Before the flare-up, crude prices had hovered around $76 per barrel. By late last week, international Brent crude hit $126 per barrel—a level not seen in four years—before retreating to $116.

The sudden spike has created fresh headaches for the oil majors. Industry sources say companies are now bleeding ₹2,400 crore daily due to the elevated crude costs that feed into domestic fuel production. On a per-liter basis, this translates to effective losses of ₹14 on petrol and ₹18 on diesel, even as retail prices remain fixed.

Government Steps In

Delhi moved quickly to cushion the blow. On March 27, the government slashed excise duty on both petrol and diesel by ₹10 per liter—a move that will drain approximately ₹12,000 crore monthly from the exchequer.

To offset this revenue hit, the government turned to an unconventional lever: the windfall tax on diesel exports. On April 11, authorities hiked the export levy from ₹21.50 per liter to ₹55.5 per liter—a more than 150 percent jump in just a fortnight.

The gambit appears to be working. India exports roughly 191 crore liters of diesel monthly. At the new tax rate, the government is now collecting approximately ₹10,500 crore every month from these exports alone—nearly enough to make up for excise revenue losses.

Companies Ration Supply

Behind the scenes, oil companies have begun implementing stricter controls. Pump operators have been instructed to limit diesel sales to customers at 200 liters per transaction—a move designed to curb bulk supplies to industrial users.

The rationing extends further. Companies have also mandated that monthly sales at retail pumps cannot exceed last year's volumes—a hard cap that essentially freezes supply growth. The strategy, industry observers note, is a direct response to unsustainable losses at current crude prices.

The Broader Picture

The situation reflects an uncomfortable paradox. For much of FY26, oil companies enjoyed a sustained period of low crude costs, allowing them to build substantial reserves. That cushion is now being tested as geopolitical risk premiums push international prices higher.

The Iran-US ceasefire that took effect recently has already begun to temper crude prices. India's crude oil basket, which had climbed to $150 per barrel at the conflict's peak, has since retreated to around $100 per barrel.

Still, uncertainties linger. Companies remain anxious about sustained price elevation, and the government's tax measures—while creative—come with their own trade-offs. The windfall tax on exports, for instance, may eventually dampen India's refining competitiveness in global markets.

For now, the oil sector navigates a precarious balance: nursing temporary losses while maintaining supply to a nation deeply dependent on fuel imports and domestic refining capacity.