Oil Marketing Companies Face Steep Financial Strain: LPG Under-Recoveries Exceed ₹53,700 Crore Amid Subsidy Uncertainty

Overview

A Nuvama Research report highlights significant financial pressure on Oil Marketing Companies (OMCs) due to LPG under-recoveries totaling ₹53,700 crore. While the government plans to release ₹30,000 crore in subsidies from November 2025, this amount covers only about 56% of current losses, potentially widening the financial gap. The report also cautions about rising under-recoveries, pressure on OMC capital expenditure, potential de-rating of city gas distribution companies, and optimistic production guidance from ONGC.