Oil companies on Friday announced an increase of Rs 3 per litre in petrol and diesel prices, leading to higher fuel rates across major cities in India. The revised prices came into effect immediately.
The latest increase is significantly lower than the full rise required to offset the sharp surge in global crude oil prices caused by the ongoing West Asia conflict. Alongside petrol and diesel, CNG prices in Delhi-NCR have also been raised by Rs 2 to Rs 79.09 per kg. Earlier, CNG prices in the Mumbai region had also been increased by Rs 2 by Mahanagar Gas Limited.
Government Says No Fuel Shortage, No Rationing Planned
The Centre has maintained that there is no shortage of fuel in the country despite disruptions in global energy supply routes linked to the Iran conflict and the Strait of Hormuz crisis.
Oil Secretary Neeraj Mittal recently stated that there is no need for panic and confirmed that there are sufficient fuel supplies available. Officials added that India currently holds around 60 days of fuel reserves and nearly 45 days of LPG inventories despite volatility in international energy markets.
New Petrol and Diesel Prices in Major Cities
According to ANI, petrol prices in Delhi have increased from Rs 94.77 to Rs 97.77 per litre, while diesel now costs Rs 90.67 per litre compared to the earlier Rs 87.67.
Fuel prices have crossed Rs 100 per litre in several cities following the hike.
Kolkata
- Petrol: Rs 108.74 per litre after a Rs 3.29 increase
- Diesel: Rs 95.13 per litre after a Rs 3.11 increase
Mumbai
- Petrol: Rs 106.68 per litre after a Rs 3.14 increase
- Diesel: Rs 93.14 per litre after a Rs 3.11 increase
Chennai
- Petrol: Rs 103.67 per litre after a Rs 2.83 increase
- Diesel: Rs 95.25 per litre after a Rs 2.86 increase
Why Fuel Prices Were Raised
Retail fuel prices had remained largely unchanged since April 2022, except for a Rs 2 per litre reduction announced in March 2024 before the Lok Sabha elections.
Public sector oil companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — had suspended daily price revisions in 2022 to protect consumers after global crude oil prices surged following Russia’s invasion of Ukraine.
Although oil companies recovered some losses when crude prices eased, the ongoing conflict in West Asia has once again pushed international oil prices sharply higher. Global crude prices have reportedly risen by more than 50 per cent since the conflict began.
India’s crude oil basket averaged around $69 per barrel in February before the conflict escalated, but prices later surged to nearly $113-114 per barrel.
India’s Heavy Dependence on Imported Crude
India imports nearly 90 per cent of its crude oil requirements, making the economy highly vulnerable to fluctuations in global energy prices.
The government had previously avoided passing higher crude costs on to consumers by relying on state-run oil companies, tax adjustments and supply management measures.
Oil Minister Warns of Massive Losses for State-Run Fuel Retailers
Oil Minister Hardeep Singh Puri recently warned that if fuel prices remained unchanged while global crude prices stayed elevated, public sector oil retailers could suffer losses of nearly Rs 1 lakh crore within a single quarter.
Speaking at the CII Annual Business Summit, Puri said the three state-owned fuel retailers are currently losing around Rs 1,000 crore every day. Combined under-recoveries have reportedly reached nearly Rs 1.98 lakh crore.
He added that the widening gap between international benchmark prices and domestic retail prices has placed immense financial pressure on oil marketing companies.
RBI Governor Signals Further Fuel Price Revisions Possible
Reserve Bank of India Governor Sanjay Malhotra also indicated earlier this week that petrol and diesel prices may need further revisions if the West Asia conflict continues for a prolonged period.
Addressing a conference in Switzerland, Malhotra said India’s heavy dependence on imported energy and fertilisers means the domestic economy is beginning to feel the effects of global supply disruptions.
He noted that if the crisis persists, the government may eventually have to pass a portion of the higher costs on to consumers through additional fuel price hikes.
PM Modi Urges Fuel Conservation
Meanwhile, Prime Minister Narendra Modi has urged citizens to reduce fuel consumption and edible oil usage as part of broader efforts to conserve foreign exchange reserves amid rising global energy costs.
