Kashmir Impulse Desk

New Delhi, May 15 

India on Friday raised petrol and diesel prices by Rs 3 per litre each, marking the first increase in fuel rates in more than four years as state-run retailers grappled with mounting losses caused by elevated global crude oil prices.

Petrol in New Delhi will now cost Rs 97.77 per litre, up from Rs 94.77, while diesel prices rose to Rs 90.67 from Rs 87.67 per litre, industry sources said.

The increase comes 16 days after assembly elections concluded in the states of Assam, Kerala, Tamil Nadu and West Bengal. 

Fuel prices had remained unchanged during the polling period despite a sharp rise in international oil prices linked to the ongoing West Asia conflict.

The latest revision follows a prolonged freeze in retail fuel prices since April 2022, except for a one-time cut of Rs 2 per litre each in March 2024 ahead of the national elections. 

Prices were last increased in April 2022.

In Mumbai, petrol will now retail at Rs 106.68 per litre and diesel at Rs 93.14. 

Kolkata prices rose to Rs 108.74 for petrol and Rs 95.13 for diesel, while Chennai rates increased to Rs 103.67 and Rs 95.25. 

Fuel prices vary across states because of differences in value-added tax.

Although petrol and diesel prices are officially deregulated, revisions are often influenced by political considerations.

Global energy prices surged after the United States and Israel attacked Iran on February 28 and Tehran retaliated, disrupting traffic through the Strait of Hormuz, a critical route for nearly a fifth of global oil and gas trade. 

Crude oil prices climbed above USD 120 per barrel at the peak of the conflict, compared with about USD 70-$72 before the escalation.

While prices have eased somewhat, crude has continued to trade in the USD 104 to USD 110 per barrel range, intensifying pressure on fuel retailers. 

Industry sources said state-owned retailers were losing about Rs 14 per litre on petrol, Rs 42 per litre on diesel and Rs 674 per LPG cylinder before Friday’s price increase.

Earlier this week, Oil Minister Hardeep Singh Puri said Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd were collectively losing around Rs 1000 crore per day, with cumulative quarterly losses estimated at nearly Rs 1 lakh crore.

To cushion consumers from global price volatility, the federal government had reduced excise duty on petrol and diesel by Rs 10 per litre each on March 27.

Private retailers had already raised fuel prices earlier this year. 

Nayara Energy increased petrol prices by Rs 5 per litre and diesel by Rs 3 in March, while Shell raised petrol prices by Rs 7.41 and diesel by Rs 25 per litre from April 1. 

In Bengaluru, Shell outlets are selling petrol at Rs 119.85 per litre and diesel at Rs 123.52.

Cooking gas LPG prices were also increased in March by Rs 60 per cylinder, though industry officials said prices remain below actual costs.

Industry sources described Friday’s hike as a calibrated move aimed at partly easing margin pressures on oil marketing companies without triggering a major inflation shock. 

They said, however, that the increase would likely feed into broader inflation through higher freight, logistics and input costs.

India’s retail inflation, measured by the Consumer Price Index, rose to 3.48 percent in April 2026 from 3.40 percent in March, while wholesale price inflation accelerated to 8.3 percent, the highest level in 42 months, driven largely by rising fuel and energy costs.

Petrol and diesel do not have separate weights in the CPI basket but are reflected under transport, communication and fuel-related categories, economists say.

State-run refiners had suspended daily price revisions in April 2022 to shield consumers from a spike in crude prices following Russia’s invasion of Ukraine. 

Although losses narrowed when oil prices softened later, renewed conflict in West Asia has pushed import costs sharply higher again.

India’s crude oil basket averaged about USD 69 per barrel in February before the outbreak of hostilities in West Asia, but climbed to about USD 113 to USD 114 in subsequent months.

Prime Minister Narendra Modi recently urged citizens to reduce fuel consumption, use public transport and adopt work-from-home measures where possible to reduce the country’s oil import bill.