NEW DELHI: Petrol and diesel prices were hiked by Rs 3 per litre each on Friday after state-run oil companies faced mounting losses due to a sharp rise in global crude oil prices triggered by the ongoing West Asia conflict.Petrol in Delhi now costs Rs 97.77 per litre, up from Rs 94.77, while diesel prices have risen to Rs 90.67 per litre from Rs 87.67, according to industry sources.The increase comes 16 days after assembly elections concluded in Assam, Kerala, Tamil Nadu and West Bengal. Fuel prices had remained unchanged throughout the election period despite a steep rise in international crude oil prices.Petrol prices in Mumbai have risen to Rs 106.68 per litre, while diesel now costs Rs 93.14. In Kolkata, petrol prices crossed Rs 108, reaching Rs 108.74 per litre, while diesel climbed to Rs 95.13. In Chennai, petrol now costs Rs 103.67 per litre and diesel Rs 95.25 per litre.Fuel prices differ across states because of varying VAT rates.
Petrol prices in major cities
Diesel prices in major cities
Why were fuel prices increased?
- Iran conflict pushed up crude oil prices
The latest
fuel price hike comes amid a sharp rise in global crude oil prices following the conflict involving Iran, the US and Israel. The tensions disrupted shipping through the Strait of Hormuz, one of the world’s most critical energy trade routes that carries nearly one-fifth of global oil and gas supplies. - Global crude prices surged sharply
Crude oil prices, which were around USD 70-72 per barrel before the conflict, surged past USD 120 per barrel during the peak of tensions. Although prices have eased slightly, they continue to remain elevated at around USD 104-110 per barrel, significantly increasing fuel import costs for India.
Earlier this week, Union Petroleum Minister Hardeep Singh Puri said state-run oil companies were collectively losing nearly Rs 1,000 crore per day due to rising crude prices. He estimated the cumulative losses at nearly Rs 1 lakh crore.
- Strait of Hormuz disruption raised supply fears
The near-closure and severe disruption around the Strait of Hormuz triggered fears of supply shortages in global energy markets. Around 30 per cent of India’s crude oil imports pass through the Strait of Hormuz, making the country highly vulnerable to any disruption in the region. The uncertainty increased the risk premium on crude oil and added pressure on Indian oil marketing companies.
- Weak rupee made imports costlier
The depreciation of rupee against the US dollar further worsened the situation. Rupee has emerged as the worst-performing Asian currency this year, declining more than 6 per cent amid elevated crude prices, a strong dollar and concerns over the West Asia crisis. Since India imports most of its crude oil in dollars, a weaker rupee directly raises the cost of fuel imports.
Rupee on Friday fell 29 paise to 95.93 against US dollar in early trade.
- Oil companies were suffering massive losses
Industry sources said state-owned fuel retailers had been incurring heavy losses as domestic fuel prices remained frozen despite rising global energy costs. Before Friday’s revision, oil companies were reportedly losing around Rs 14 per litre on petrol, Rs 42 per litre on diesel and Rs 674 per LPG cylinder.
- Fuel prices had remained frozen since 2022
Petrol and diesel prices had largely remained unchanged since April 2022, except for a one-time reduction of Rs 2 per litre announced in March 2024 ahead of the Lok Sabha elections. State-run firms had suspended daily price revisions after global oil prices surged following Russia’s invasion of Ukraine.
- Private retailers had already raised prices
While public sector companies held rates steady, private fuel retailers had already increased prices earlier this year. Nayara Energy raised petrol prices by Rs 5 per litre and diesel by Rs 3 in March, while Shell increased petrol prices by Rs 7.41 and diesel by Rs 25 per litre from April 1.
According to PTI, industry sources described the latest increase as a “calibrated” step aimed at partially easing pressure on oil marketing companies without causing a major inflation shock.
What next?
The fuel price hike is expected to have an indirect impact on inflation by increasing transportation, logistics and input costs across sectors.India’s retail inflation, measured by the Consumer Price Index (CPI), rose to 3.48 per cent in April 2026 from 3.40 per cent in March. Wholesale price inflation (WPI) surged to 8.3 per cent, marking a 42-month high, largely driven by higher fuel and energy prices.Economists told PTI that petrol and diesel price increases affect not just transport costs but also food prices, manufacturing expenses and supply chains. The price revision also comes amid the Centre’s broader push for fuel conservation and reducing foreign exchange outflows.Prime Minister Narendra Modi recently urged citizens to reduce fuel consumption, use public transport, opt for carpooling and work from home wherever possible to conserve foreign exchange spent on oil imports.
