Petroleum ministry says strategic reserves and commercial stocks secure supply as refiners report under-recoveries on petrol, diesel

 India currently holds the equivalent of about 76–80 days of fuel cover across strategic petroleum reserves, refinery inventories and commercial stocks, Petroleum Minister Hardeep Singh Puri said on Monday, even as oil companies told the government they are incurring large daily losses on retail fuels.

According to officials, the minister made the assessment in a briefing with senior ministry staff and industry representatives, stressing that short-term shocks in the Middle East would be manageable from existing stocks and alternative sourcing. “We have a comfortable cushion to meet short disruptions,” an official summary of his comments showed.

Refiners report steep under-recoveries

In a separate briefing the same day, Additional Secretary Praveen Khanuja said state-run refiners are facing under-recoveries — the gap between administered pump prices and actual costs — of roughly ₹30 per litre on diesel and about ₹6 per litre on petrol. That, Khanuja said, translates into an estimated daily loss of about ₹600–700 crore for oil companies, excluding LPG.

Industry sources familiar with the discussions confirmed the figure and said companies have flagged the strain to the ministry, urging support measures if sustained volatility pushes losses higher.

Short-term resilience, long-term risks

Puri told reporters that India’s priority is to maintain at least 60 days of cover for crude oil, natural gas and LPG each — a threshold the country is currently meeting, he said. He cautioned, however, that a prolonged escalation in the Gulf, especially if maritime chokepoints such as the Strait of Hormuz were closed for an extended period, would alter the outlook.

“If disruptions remain short-lived, we can manage through strategic reserves and alternate routes,” an aide to the minister said. “But a long-drawn conflict would have broader impacts on global energy markets and will need additional responses.”

Officials stressed that if the Strait of Hormuz were blocked temporarily, India could withstand around 30 days of disruption using available inventories and adjusted supply chains. The government has also been pursuing diversification of suppliers and additional long-term contracts to reduce concentration risk.

Supply diversification underway

Puri pointed to steps taken to widen supply sources beyond Gulf producers. He said talks have taken place to secure extra LPG cargoes from the United Arab Emirates if required, and pointed to planned gas supplies from Mozambique as another buffer that would strengthen India’s energy security over time.

The minister also highlighted domestic measures: expansion of drilling and exploration, faster investment in refining capacity and stock management. “We are not just dependent on strategic reserves — refinery inventories and retail stocks form a significant part of our buffer,” he said, noting India currently operates 24 refineries and continues to expand capacity.

Domestic stock management defended

Responding to criticism that India did not build up reserves when crude prices dipped after the pandemic, Puri rejected the charge. Officials explained that inventory management balances commercial use and replenishment; crude cannot be stored indefinitely at the cost of foregoing domestic supply needs and refinery runs.

The ministry said it will continue active stock rotation and procurement aligned with market conditions, while also accelerating domestic exploration projects, including in the Andaman basin.

Impact on consumers and next steps

For now, the immediate consumer impact is muted because pump prices in India remain regulated in part and retail changes reflect global price swings with a lag. Still, the reported under-recoveries signal pressure on state refiners’ finances, and sustained losses could push discussions on fiscal support, temporary price adjustments or targeted relief measures.

Officials said they will continue daily monitoring of port call schedules, cargo availability and refinery throughput. Industry sources expect the ministry to hold further meetings this week to review options if tensions in the Middle East intensify.

Related context

The ministry noted that LPG connections in the country have risen from about 14 crore in 2014 to more than 33 crore now, reflecting strengthened domestic distribution networks that would be mobilised in any disruption. Separate briefings this week also warned of inflationary pressure on household fuels if international LPG prices remain elevated.

In a major boost for bilateral ties, the US cuts India tariffs on goods from 25% to 18%, President Donald Trump announced Monday after a phone call with Prime Minister Narendra Modi. The move ends months of trade tensions, signaling stronger India-US partnership amid global energy shifts.

Trump-Modi Call Sparks Trade Breakthrough

Trump shared details on Truth Social late Monday, revealing discussions on the Russia-Ukraine war. "PM Modi agreed to stop purchasing oil from Russia. India will now buy more oil from the United States," he posted. He added flexibility for Venezuela oil imports if needed, aiming to pressure Russia and aid Ukraine.

The deal slashes the 2019 reciprocal 25% tariff—plus an extra 25% penalty for India's Russian oil buys—to a flat 18%. A White House official confirmed the Russian oil penalty ends immediately. Trump highlighted India's "Buy American" commitment: over $500 billion (₹46 lakh crore) in US energy, tech, agriculture, and coal.

PM Modi responded swiftly on X: "Thank you, President Trump, on behalf of 1.4 billion Indians." He praised the tariff cut on "Made in India" products, noting it opens opportunities between the world's top economies and democracies.

Why This Matters Now for India-US Ties

This India-US trade deal arrives amid volatile global oil markets and US election-year focus on "America First." With Russia supplies strained by sanctions, India's shift reduces energy costs and aligns with Western allies. US Ambassador Sergio Gor called it "almost final," with technical papers pending. He noted India's tariffs now rank among the world's lowest, reflecting Modi-Trump friendship.

• Key Wins for India: Lower export barriers boost textiles, pharma, and gems amid slowing global growth.
  
  

• US Gains: Massive "Buy American" purchases create jobs; Venezuela option eases Ukraine war pressures.
  
  

• Global Ripple: Eases India-Russia ties strain, stabilizes oil prices.
  
  

Trump hyped the mood pre-call with Truth Social posts: India Gate photos and a Modi cover. He teased his "Arc de Trump" arch in Washington, inspired by triumphs like India's.

Road Ahead for Stronger Partnership

Modi emphasized eagerness to "strengthen India-US partnership to new heights." Experts see this as a template for zero tariffs and non-tariff barriers. For Indian exporters, it's timely relief—trade with the US hit $120 billion last year.

As technical signings loom, this deal underscores personal diplomacy's power. Stay tuned for implementation details.