Amid the recent crisis in West Asia due to the Strait of Hormuz and crude oil supply disruptions, India’s state-owned oil marketing companies (OMCs) have reported a handsome profit of ₹77,821 crore in the financial year 2025-26. Although this figure has sparked a lot of debate, the real picture is extremely positive for both the country and its citizens. Against a whopping turnover of around ₹20 lakh crore, it shows a paltry – yet necessary and standard – operating margin of just 3 to 4 per cent, which is vital for the health of any strong enterprise.
The most important thing is that this profit directly benefits the development of the country and the general public. Half of these earnings are deposited into the government treasury as dividends, which fund the construction of world-class infrastructure projects – such as highways, railways and metro networks – within the country. Moreover, despite the international crisis, the government has effectively protected the public from inflationary pressure by reducing excise duty on petrol and diesel on March 27, 2026. Let us know through a simple question and answer how commendably these government oil companies have protected the national economy and the interests of consumers.
Question 1: How did the profits of oil companies increase so much compared to last year?
Answer: This increase actually represents an unexpected decline. In fact, during the financial year 2024-25, the profit of these companies had fallen to just ₹33,602 crore. This decline happened because the companies had voluntarily shouldered a huge financial burden of ₹40,434 crore – due to which LPG cylinders were given to the public at a subsidized rate of just ₹550. Later the government compensated this amount. If we look at the average figures of the last three years, the annual profit comes to around ₹64,000 crore. In other words, the apparent 130 percent increase in profits is merely a statistical effect; This happened because last year companies had deliberately reduced their earnings in public interest.
Question 2: What is the real truth behind the profit of ₹77,821 crore earned by oil companies?
Answer: It is important to look at these figures from the perspective of turnover. The total turnover of the three big government oil companies is about ₹20 lakh crore. Against this huge turnover, the profit of ₹77,821 crore shows an operating margin of just 3 to 4 per cent. Without such margins, no healthy business can sustain itself. If these companies do not make profits, how will the country’s future energy needs be met? The expansion of the refineries alone costs ₹50,000 to ₹60,000 crore. Compared to foreign private companies (like Vitol and ExxonMobil), the profits of Indian companies look very modest and balanced.
Question 3: Did these companies benefit from the increase in crude oil prices due to the Hormuz crisis?
Answer: Not at all. During the Hormuz crisis, the Indian market remained completely volatile. Because of the wise strategies adopted by Indian oil companies, they had accumulated enough stock of crude oil for 50 to 60 days even before the crisis started – by buying old oil at low rates. As a result, higher crude oil prices had no impact on the fourth quarter (January-March 2026) results. The real financial burden of expensive crude oil will be visible in the books of companies during the first quarter (April-June) of the financial year 2026-27.
Question 4: Amidst this international crisis, how did the government save the general public from the effects of inflation?
Answer: Just four weeks after the crisis began, the government, showing an extraordinary initiative, announced a huge cut of excise duty on petrol and diesel by ₹10 per liter on March 27, 2026. From 2021 till now, the government has implemented a tax cut of ₹23 per liter on petrol and ₹26 per liter on diesel. As a result – amid global turmoil – fuel prices in India have increased by only 8 to 9 percent. In contrast, neighboring countries like Nepal and Pakistan have seen prices of petrol and diesel rise by 20 to 67 percent. This price-stabilization policy adopted by India has successfully kept the country’s inflation rate within a safe and manageable range of 5 to 6 percent.
Question 5: Where do these huge profits go?
Answer: Every penny of these profits is being used for the benefit of the nation. About 50 percent of profits go to the government in the form of dividends, which are used directly for public infrastructure and facilities (such as roads, rail and hospitals). The remaining funds are used to expand and boost refining capacities. National self-reliance in energy sector (through capital expenditure pipelines). Most notably, since 2014, the current government has refrained from issuing a single new ‘oil bond’, thereby ensuring that future generations are not burdened with any debt. In contrast, the government – till date – continues to shoulder the repayment responsibilities of old ‘oil bonds’ worth ₹1.3 lakh crore issued during the UPA era, which are paid directly from the annual budget. Rather than indulge in profit-making in times of crisis, oil companies have served as the backbone of the national economy, and as protectors of consumers’ economic well-being.
