In response to soaring international oil prices and significant losses in domestic fuel sales, the Indian government has introduced a cap on refinery margins, setting it at $15 per barrel. This decision follows the implementation of a Special Additional Excise Duty (SAED) on fuel exports, aimed at curbing windfall profits for refiners while boosting domestic fuel availability. The oil marketing companies (OMCs) have also begun fixing discounts on refinery transfer prices (RTP), which will reduce the internal prices at which refineries sell fuel to them. For instance, a discount of ₹22,342 per kilolitre was set for diesel, lowering the RTP from ₹85,349 per kl to ₹63,007 per kl. As of April 1, 2026, OMCs reported under-recoveries of ₹24.40 per litre on petrol and ₹104.99 per litre on diesel, stemming from a retail price freeze since April 2022. While the government believes these measures will distribute financial burdens across the refining sector, analysts caution that they could adversely affect independent refiners and distort market commitments.