Fuel prices across India were increased on Friday with immediate effect, as state-run oil marketing companies (OMCs) raised petrol and diesel rates by up to Rs 3 per liter amid sustained volatility in global crude oil markets and mounting pressure on domestic fuel retailers.
The latest revision comes after weeks of rising international crude prices linked to ongoing geopolitical tensions in West Asia, particularly the continuing US-Israel-Iran conflict and disruptions around the Strait of Hormuz, a key global oil shipping route.
In the national capital, petrol prices rose by Rs 3 per litre to Rs 97.77, while diesel prices increased to Rs 90.67 per litre. Oil companies said the price adjustment was necessary to partially offset the sharp increase in import and refining costs caused by elevated global crude prices.
Among the four major metro cities, Kolkata witnessed the steepest increase in petrol prices. Petrol there climbed by Rs 3.29 to Rs 108.74 per litre. Mumbai recorded a rise of Rs 3.14, taking petrol prices to Rs 106.68 per litre, while Chennai saw an increase of Rs 2.83, pushing petrol prices to Rs 103.67 per litre.
Diesel prices also rose significantly across metro cities. In Kolkata, diesel now costs Rs 95.13 per litre after an increase of Rs 3.11. Mumbai recorded a similar hike, taking diesel prices to Rs 93.14 per litre. In Chennai, diesel prices increased by Rs 2.86 to Rs 95.25 per litre.
Apart from petrol and diesel, liquefied natural gas (LNG) prices were also increased by Rs 2 per kilogram.
The fuel price hike follows a sharp rise in wholesale fuel inflation in April, driven by increasing prices of crude petroleum, natural gas, petrol, diesel and LPG. Official data released on Thursday showed petrol inflation surged dramatically to 32.4 per cent compared to 2.50 per cent in the previous month. Inflation in high-speed diesel also accelerated sharply to 25.19 per cent from 3.62 per cent earlier.
Global crude oil prices have remained elevated since the outbreak of the West Asia conflict on February 28. Brent crude prices have hovered around or above the USD 100 per barrel mark amid fears of supply disruptions, shipping risks and uncertainty over the stability of ceasefire negotiations in the region.
Industry reports indicate that India’s public sector oil marketing companies have been under growing financial stress as retail fuel prices remained largely unchanged for several months despite rising global input costs. According to estimates cited by Bloomberg News, state-run refiners were reportedly losing nearly Rs 10 billion per day on fuel sales before the latest revision.
Sources indicated that OMCs had initially absorbed a significant portion of the increase by relying on lower-cost inventories accumulated earlier in the year. However, those reserves were gradually exhausted during April and May, causing losses to widen further.
India, which is the world’s third-largest oil consumer, remains highly dependent on imported crude oil and is therefore particularly vulnerable to global supply disruptions and shipping instability around strategic maritime routes such as the Strait of Hormuz.
The increase in fuel prices is also expected to impact transportation costs, logistics, manufacturing and inflation across several sectors of the economy in the coming weeks. Economists warn that continued instability in global energy markets could place additional pressure on household expenses and industrial input costs if crude oil prices remain elevated for a prolonged period.
