New Delhi, May 28: Amid ongoing political debates regarding the profits of government oil marketing companies (OMCs), new data indicates that the total combined profit for the fiscal year 2025-26 reached ₹77,821 crore. However, labeling this as “windfall profits” does not provide a complete picture.
The opposition has consistently accused OMCs of a 130% profit increase amid the crisis in West Asia and rising fuel prices. Yet, the data suggests that this increase is primarily in comparison to an unusually weak previous fiscal year.
In fact, the profit for the fiscal year 2024-25 was only ₹33,602 crore, significantly lower than the ₹47,384 crore from the previous year, 2023-24. A major factor for this decline was an under-recovery of ₹40,434 crore on domestic LPG, which the oil companies absorbed themselves. The central government later compensated for this loss.
When compared to normal years, the profit of ₹77,821 crore for 2025-26 is nearly equivalent to ₹80,986 crore from 2023-24. This means that the reported 130% increase is more a reflection of recovering from last year’s losses rather than an unexpected surge in earnings.
According to the data, the total business of the three government OMCs is around ₹20 lakh crore. Thus, the profit of ₹77,821 crore constitutes only about 3 to 4 percent of total revenue, which is considered a standard “working margin” for any large commodity refining company.
Indian Oil Corporation (IOC) alone generates an annual revenue of nearly ₹10 lakh crore, with a typical profit ranging between ₹20,000 to ₹30,000 crore, resulting in a profit margin of approximately 3 percent.
The report also highlights that nearly half of this profit is returned to the Government of India as dividends, which are utilized for road, highway, railway, and other public investment projects. The remaining funds are invested in refinery expansions and significant capital investment projects, where the cost of a major refinery expansion can reach ₹50,000 to ₹60,000 crore.
The government had already reduced excise duty on petrol and diesel by ₹10 per liter on March 27, 2026. Despite this, retail fuel prices in India have only increased by 8 to 9 percent since the onset of the West Asia crisis, whereas neighboring countries have seen price hikes ranging from 20 to 67 percent.
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