New Delhi, April 2 – The government's calibrated 8.5 per cent increase in aviation turbine fuel (ATF) prices for domestic airlines may offer short-term relief to oil marketing companies (OMCs), according to analysts.
Analysts at global brokerage firm Nomura estimate that state-owned fuel retailers continue to suffer significant losses on ATF sales amid a war-driven surge in global oil prices.
At current prices, the brokerage estimates that OMCs are losing around ₹64 per litre on domestic ATF sales, implying a marketing loss of approximately $109 per barrel.
Based on prevailing prices, the brokerage pegs annual ATF losses at ₹23,600 crore for Indian Oil Corporation, ₹9,500 crore for Bharat Petroleum Corporation, and ₹5,300 crore for Hindustan Petroleum Corporation.
ATF prices for domestic carriers were raised by ₹8,289.04 per kilolitre or 8.56 per cent, from ₹96,638.14 per kilolitre to ₹1,04,927.18 per kilolitre last month.
While the increase is significant, it falls far short of what global oil price movements would have warranted.
Meanwhile, prices for foreign carriers and non-scheduled, charter, and ad hoc operators were raised even more steeply, by 114.5 per cent, to ₹2,07,341.22 per kilolitre.
Although ATF accounts for only 2-6 per cent of total marketing volumes for OMCs, state-owned retailers dominate the segment with over 90 per cent market share, with approximately 65 per cent of India's total ATF sales going to domestic airlines.
Furthermore, rates for commercial LPG and premium petrol were also increased on Wednesday, amid firm energy trends, although OMCs continue to incur losses on domestic LPG cylinders.
Commercial LPG prices were hiked by around 10 per cent.
Regarding city gas distributors, Nomura flagged Gujarat Gas as potentially the most affected, citing its higher reliance on short-term and spot liquefied natural gas procurement, where prices have doubled since the conflict began on February 28, 2026.
The brokerage also noted that the windfall tax is not applicable to Reliance Industries' special economic zone refinery.
Shares of state-owned oil marketing companies (OMCs) – such as IOCL, BPCL, and HPCL – traded down by up to 5 per cent on the BSE during intra-day trading on Thursday.
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