India, May 15 -- The Centre's decision to raise petrol and diesel prices by just 3 per litre reflects a calibrated strategy to shield consumers from the sharp surge in global crude oil prices, even as public sector oil marketing companies (OMCs) continue to absorb substantial losses, officials said on Friday.

According to government sources, the increase remains significantly below the actual under-recoveries faced by state-run fuel retailers. Current under-recoveries are estimated at nearly 26 per litre for petrol and as high as 82 per litre for diesel, indicating that the bulk of the financial burden is still being absorbed by companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corpo...