Consumers across India are facing another round of fuel price hikes as petrol and diesel rates have increased significantly. The latest surge marks a continuation of rising prices, with rates jumping nearly Rs 5 per litre in less than ten days. State-owned firms are reportedly passing on the burden of soaring international oil prices to consumers, leading to increased transportation costs and inflationary pressures.
The recent revision pushed petrol prices higher by 87 paise per litre and diesel by up to 91 paise across the country, according to industry sources. This increase follows a prolonged freeze in retail fuel prices, occurring amidst elevated crude oil prices in the global market. Tightening refining margins and a weaker rupee have sharply increased the cost of imports, further contributing to the rising fuel costs in India.
As per information available with TahirRihat.com, petrol price in Delhi has surged by 87 paise, reaching Rs 99.51 per litre, up from Rs 98.64 previously. Similarly, diesel price has been hiked by 91 paise to Rs 92.49 a litre from Rs 91.58. Concerns are mounting over the potential impact on inflationary pressures and increased transportation costs throughout the economy. The state-owned oil marketing companies ended their hiatus in rate revision on May 15, initiating this series of price hikes.
Since May 15, petrol and diesel prices have risen close to Rs 5 a litre, exacerbating concerns about the broader economic impact. On May 15, petrol and diesel prices were increased by Rs 3 per litre each, followed by another increase of 90 paise a litre on May 19. Private fuel retailers, including Nayara Energy, have mirrored the price increases announced by their state-owned counterparts, raising petrol and diesel rates by a similar amount on all three occasions.
Nayara Energy had previously raised petrol and diesel prices by Rs 5 and Rs 3 per litre, respectively, in March. Shell had also increased petrol prices by Rs 7.41 a litre and diesel by as much as Rs 25 per litre from April 1. In contrast, Jio-BP, the fuel retailing joint venture of Reliance Industries Ltd and BP Plc, has been adjusting rates at its pumps in alignment with Public Sector Undertakings (PSUs).
Following the latest increase, petrol at PSU pumps in Mumbai now costs Rs 108.49 per litre, and diesel is priced at Rs 95.02. In Kolkata, petrol prices have risen to Rs 110.64, and diesel costs Rs 97.02. Chennai sees petrol priced at Rs 105.31 and diesel at Rs 96.98. These prices vary across states due to the imposition of local taxes.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) collectively control 90 per cent of India’s fuel market. The recent price hikes are occurring against the backdrop of a surge in global crude oil prices. Since late February, crude oil prices have increased by more than 50 per cent, influenced by events such as US-Israeli strikes on Iran and disruptions to shipments through the Strait of Hormuz, which is a critical global oil transit route.
Fuel retailers had previously maintained low pump prices despite rising input costs, a decision the government stated was intended to shield consumers from inflation. However, opposition parties have criticized the government, alleging that the price revisions were delayed until after key state elections. The May 15 increase came after the ruling Bharatiya Janata Party (BJP) expanded its electoral presence by winning three of five state and UT elections, including West Bengal.
Despite the current price increases, fuel retailers are reportedly still experiencing substantial losses. Petroleum Ministry’s Joint Secretary Sujata Sharma stated earlier this week that the May 15 increase reduced losses by approximately a fourth; however, state-run oil firms were still losing around Rs 750 crore per day. According to Crisil, even after the earlier hike, oil marketing companies were losing about Rs 10 per litre on petrol and Rs 13 per litre on diesel.
Petrol and diesel prices are currently at their highest levels since May 2022. Rates had remained largely स्थिर since April 2022, with the exception of a Rs 2-per-litre cut in March 2024, implemented ahead of national elections. These fuel price increases take place amid broader government efforts to curb India’s oil import bill and reduce fuel consumption.
Prime Minister Narendra Modi recently urged citizens and government departments to conserve fuel, promote remote working, and reduce non-essential travel. The objective is to mitigate the pressure elevated energy prices place on foreign exchange reserves and the threat they pose to widening the current account deficit. Implementing these practices is intended to alleviate some of the strain exerted by rising energy costs.
Several state governments have already directed departments to curb travel and reduce office attendance in response to the Prime Minister’s call for conservation. In addition to petrol and diesel, compressed natural gas (CNG) prices have also experienced increases, rising by Rs 3 per kg in two installments within this period.
Industry officials have suggested that the recent revisions appear to be strategically calibrated to partially alleviate pressure on oil companies without causing a significant inflation shock. However, they acknowledge that the increases will inevitably contribute to existing price pressures within the economy. India’s retail inflation accelerated to 3.48 per cent in April from 3.40 per cent in March, while wholesale inflation climbed to a 42-month high of 8.3 per cent, primarily driven by higher fuel and energy costs. (PTI)
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.