Petrol, Diesel Prices Hiked for Second Time A Week, Up 90 Paise

Petrol and diesel prices were hiked by about 90 paise per litre on Tuesday, marking the second increase in fuel rates in less than a week after state-run oil firms ended a nearly four-year freeze on revisions.

The increase pushed petrol prices in New Delhi to ₹98.64 per litre from ₹97.77, while diesel rose to ₹91.58 from ₹90.67, according to industry sources.

On Friday, petrol and diesel prices were raised by ₹3 per litre on Friday for the first time in more than four years, as surging global crude prices following the Iran war forced state-run fuel retailers to pass on part of their mounting losses after months of holding rates steady through key state elections.

Rates vary across states due to differences in value-added tax.

On May 15, compressed natural gas (CNG) prices were also raised by ₹2 per kg in cities, including Delhi and Mumbai. On Sunday, CNG prices were again hiked by Re1 a kg.

Global crude prices have surged more than 50% since US-Israeli strikes on Iran on February 28 and Tehran's retaliation, disrupting flows through the Strait of Hormuz, a key artery for global oil shipments.

Despite the surge, retail fuel rates were kept frozen at two-year-old rates as part of what the government said was an effort to shield price-sensitive consumers from higher global energy costs. But the opposition parties saw political motives behind the move as key states went to polls.

The ₹3 a litre increase on Friday followed the completion of elections and the ruling Bharatiya Janata Party (BJP) expanding its influence after winning three of five states, including West Bengal.

That increase covered just a fifth of the desired hike required to level rates with cost.

On Monday, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, had stated that the May 15 hike had cut losses by a fourth and that oil companies were still incurring about ₹750 crore a day loss.

After Tuesday's increase, petrol and diesel prices are now the highest since May 2022.

Prices have remained on freeze since April 2022, but for a one-off reduction by ₹2 a litre each on petrol and diesel in March 2024, just before Lok Sabha elections. Rates were last hiked in April 2022.

Petrol in Mumbai now costs ₹107.59 a litre and diesel costs ₹94.08 per litre. In Kolkata, petrol now costs ₹109.70 per litre and diesel ₹96.07, while in Chennai, prices increased to ₹104.49 for petrol and ₹96.11 for diesel.

Industry sources said the price hike is modest relative to the rise in crude prices and still leaves retailers absorbing significant losses.

According to Crisil, losses on petrol were about ₹10 per litre and ₹13 on diesel after May 15 increase.

The two price increases follow excise duty cuts announced in March and come as the government rolls out measures to curb fuel consumption and contain the country's oil import bill.

Prime Minister Narendra Modi last week urged fuel conservation, work-from-home practices and reduced travel as higher energy prices strain India's foreign exchange reserves and threaten to widen the current account deficit for a third straight year.

Some state governments have already instructed departments to limit travel, avoid physical meetings and operate with reduced office staffing.

Private fuel retailers had already increased pump prices. Nayara Energy, the country's largest private fuel retailer, in March, raised petrol prices by ₹5 per litre and diesel by ₹3, while Shell increased petrol prices by ₹7.41 and diesel by ₹25 per litre from April 1. In Bengaluru, Shell sells petrol at ₹119.85 per litre and diesel at ₹123.52.

Domestic cooking gas LPG prices were raised in March by ₹60 per cylinder, but they are still way lower than the actual cost. Oil companies are losing ₹674 per 14.2-kg cylinder of LPG.

Industry sources said the price hike appears calibrated - enough to partially ease margin pressure on oil companies without creating a major inflationary shock.

The increase, however, will have some impact on inflation, they said.

India's retail inflation, measured by the Consumer Price Index (CPI), rose to 3.48% in April 2026 from 3.40% in March, while wholesale price inflation (WPI) surged to 8.3%, a 42-month high, driven by a sharp rise in fuel and energy prices amid elevated global crude oil rates.