India saw its first retail fuel price revision as the West Asia conflict drives international crude to multi-year highs.
State-run oil companies raised pump prices of petrol and diesel by ₹3 per litre each across the country on Friday, while Indraprastha Gas Ltd (IGL) increased compressed natural gas (CNG) rates by ₹2 per kg in and around Delhi — the first retail fuel price revision since the West Asia conflict drove international crude to multi-year highs.
In Delhi, retail outlets of public sector oil companies are now selling petrol at ₹97.77 per litre and diesel at ₹90.67. IGL is selling CNG at ₹79.09 per kg in Delhi, ₹80.70 in Noida, ₹84.12 in Gurugram, and ₹88.44 in Ajmer. Because of local levies, pump prices vary by city: petrol is ₹108.74 in Kolkata, ₹106.68 in Mumbai, and ₹103.67 in Chennai; diesel is ₹95.13 in Kolkata, ₹93.14 in Mumbai, and ₹95.25 in Chennai.
The hike provides only partial relief. Government officials and company executives said oil marketing companies (OMCs) will still lose an estimated ₹10–12 per litre on petrol and ₹38–40 per litre on diesel, as international crude prices remain elevated. Benchmark Brent crude, which was at $72.87 a barrel on February 28 — the day the West Asia conflict broke out — surged 62% to $118.03 by April 29. It has since slightly receded and was trading at $108.55 per barrel on Friday although the figure was still 2.37% higher than $105.72 on Thursday – a change that underscores the volatility in energy prices.
At the same time, the Indian rupee has weakened to successive record lows, touching ₹95.74 per dollar on Friday — down more than 6% since the start of the year — as elevated crude import costs drive sustained dollar demand.
Prashant Vasisht, senior vice president and co-group head, Corporate Ratings at ICRA Ltd, said: “The modest hike in retail price of ₹3 per litre for petrol and diesel provides limited relief to the oil marketing companies. ICRA estimates that at crude price of $105–110 per barrel, and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about ₹500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike. Accordingly, the oil marketing companies would need to relook at the retail prices in case elevated crude oil prices persist.”
Friday’s retail rate increase was the first since April 2022, when prices were raised in the aftermath of Russia’s war in Ukraine. Between end of March and April 6, pump prices rose by roughly ₹9 per litre, often through daily increments of 80 paise.
The government had made an earlier intervention on March 27, cutting excise duty on petrol and diesel by ₹10 per litre each — a move that cost the exchequer ₹14,000 crore a month, or ₹1.68 lakh crore annualised.
That relief proved inadequate as the conflict prolonged and the Strait of Hormuz blockade continued to disrupt global energy supply chains. At an inter-ministerial briefing on May 8, the petroleum ministry’s joint secretary, Sujata Sharma, said the combined monthly under-recovery for petrol, diesel, and cooking gas had reached ₹30,000 crore.
The timing of the hike has been under scrutiny. Assembly elections concluded in the last week of April, and company executives had indicated a modest price increase would follow once polls ended.
Petroleum minister Hardeep Singh Puri said on Tuesday that OMCs were together losing ₹1,000 crore a day, and that a single quarter of losses at prevailing crude price levels would potentially erase their entire net profit for 2025–26.
On Sunday, Prime Minister Narendra Modi urged a spate of measures including fuel conservation, work-from-home practices, and limits on travel and imports, as surging global energy prices put pressure on the country’s foreign exchange reserves.
Some states have issued notices to government departments this week to restrict travel, avoid physical events and shift meetings online, while also asking them to work from home two days a week, with offices half-staffed.
Windfall tax imposed on petrol exports; diesel, ATF levies cut
Separately, the government on Friday also imposed a windfall gains tax of ₹3 per litre on petrol exports — for the first time since the West Asia crisis began — while cutting the export levy on diesel to ₹16.5 per litre from ₹23, and on aviation turbine fuel to ₹16 per litre from ₹33, effective Saturday.
The export duties, first imposed on March 26, have been revised multiple times as the government sought to balance domestic fuel availability against refiner margins. The diesel export duty alone has swung sharply — from ₹21.50 at introduction, hiked to ₹55.50 in the April 11 review, before being progressively eased.
According to PTI, the finance ministry said the levies were aimed at disincentivising exports and ensuring domestic availability of petroleum products at a time when globally elevated crude prices make exports more profitable than supplying the home market.
Opposition hits out
Members of BJP’s rival parties hit out at the increase. Tamil Nadu chief minister C Joseph Vijay called the increase “not acceptable,” saying it would hit the poor, those using two-wheelers and small cars, and vehicle operators running loans. He also accused OMCs of not passing on the benefit when crude prices had fallen in the past, while pocketing profits.
