Fuel companies have increased petrol and diesel prices by ₹3 per litre each, ending an 11-week pause on revisions as soaring global crude prices and the continuing West Asia conflict pushed up import costs. CNG prices too have been raised by ₹2 per kg, adding to concerns over inflation and higher transport expenses.
The increase comes amid persistent disruption around the Strait of Hormuz and rising geopolitical tensions involving the US, Israel and Iran, which have driven international oil prices sharply higher in recent weeks.
Petrol in Delhi will now cost ₹97.77 per litre, while diesel has gone up to ₹90.67 per litre. Oil companies said the revision reflects only a partial pass-through of rising global prices, with a substantial portion of the burden still being absorbed by retailers.
The fuel price increase has also triggered political criticism because the Centre and senior petroleum ministry officials had repeatedly indicated during the recent state assembly election campaign, particularly in West Bengal, that consumers would be protected from any immediate rise in petrol and diesel prices despite global crude volatility. Opposition parties have accused the government of delaying the hike until after the elections to avoid voter backlash, arguing that oil marketing companies had already been under severe margin pressure for weeks.
The government had maintained that retail fuel prices would remain stable and that sufficient measures were being taken to manage supply disruptions caused by the West Asia conflict. The sharp post-election increase is now likely to revive debate over the political timing of fuel price revisions and the extent of government influence over state-run oil retailers.
The ₹3-per-litre increase in petrol and diesel prices is expected to have a broad inflationary impact across the Indian economy, as fuel costs directly influence transportation, logistics and manufacturing expenses. Higher diesel prices, in particular, will raise freight charges for trucks and commercial vehicles, increasing the cost of moving food grains, vegetables, consumer goods and industrial raw materials across the country. This could push up retail prices of essential commodities, adding pressure on household budgets already strained by elevated food inflation.
Sectors such as aviation, public transport, agriculture and e-commerce delivery are also likely to face higher operating costs, which may eventually be passed on to consumers. Economists warn that if global crude prices remain elevated, the fuel hike could slow consumption demand and complicate the Reserve Bank of India’s efforts to keep inflation under control.
State-run oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — had kept retail fuel prices unchanged despite a steep rise in crude costs since the escalation of the West Asia conflict.
The companies had also frozen daily fuel price revisions in April 2022 after crude prices surged following the Russia-Ukraine war. Prices were briefly reduced by ₹2 per litre ahead of the 2024 Lok Sabha elections.
Transport operators and commuters have already expressed concern over the growing cost burden, while market analysts warned that further spikes in crude prices could trigger additional fuel revisions in the coming weeks.
With taxes forming a large part of retail fuel prices, industry groups are also expected to press for reductions in central and state levies if global oil prices remain elevated.