Even as , government sources claimed India had largely shielded consumers from the full impact of the global energy crisis, pointing out that retail fuel prices were kept unchanged for 76 days despite soaring crude oil costs and disruptions in global supply chains.
According to government data, fuel prices were increased in three phases on May 15, 19 and 23, taking the cumulative hike to around Rs 4.74 – 4.82 per litre. The Centre maintained that the where fuel prices surged sharply amid the ongoing geopolitical tensions.
Government sources said petrol and diesel prices in India rose by only around 5 per cent, while fuel costs increased by 54.9 per cent in Pakistan, 44.5 per cent in the United States and 19.2 per cent in the United Kingdom during the same period.
The latest hike comes amid (OMCs), which were reportedly incurring losses of nearly Rs 1,000 crore per day due to elevated crude prices. Sources claimed those losses have now reduced to around Rs 750 crore daily after the recent revisions.
The Centre also sought to draw a political contrast between BJP-ruled and Opposition-ruled states on fuel taxation. Government sources claim petrol and diesel remain the costliest in states such as Telangana and Kerala due to higher Value Added Tax (VAT), while rates are relatively lower in Gujarat, Uttar Pradesh, Delhi, Haryana, Goa and Assam.
According to the government, excise duty imposed by the Centre remains uniform across the country, and the difference in retail fuel prices is largely due to varying VAT rates charged by states. The Centre accused Congress and INDIA bloc-ruled states of demanding cuts in central taxes while not reducing VAT at their own level.
Government sources also highlighted that the Centre had reduced excise duty on petrol and diesel by Rs 10 per litre in March 2026, with diesel excise reportedly brought down to zero. Officials claimed the move imposed a direct burden of nearly Rs 30,000 crore on the Centre.
The government further contrasted its approach with the UPA-era policy of issuing oil bonds. According to official documents cited by sources, the UPA government issued oil bonds worth around Rs 1.34 lakh crore between 2005 and 2010 to compensate oil companies. The current government claimed it has already repaid over Rs 1.30 lakh crore of the principal amount.
Government sources also pointed to the Russia-Ukraine conflict and the Strait of Hormuz crisis, saying India continued to keep retail fuel prices under control during both global disruptions to cushion consumers from inflationary shocks.
The Centre described India as the “only major economy” that reduced or tightly controlled retail fuel prices during both global energy crises, while accusing Opposition-ruled states of continuing to collect higher taxes on petroleum products.
Petrol and diesel prices were raised again on Saturday, with petrol becoming costlier by 87 paise per litre and diesel by up to 91 paise per litre across the country, according to industry sources. The latest revision has taken the cumulative increase in fuel prices to nearly Rs 5 per litre in less than 10 days.
The back-to-back hikes follow a prolonged freeze in retail fuel prices despite a sharp rise in global crude oil prices, tighter refining margins and a weakening rupee that increased import costs.
International crude prices have climbed more than 50 per cent since late February after US-Israeli strikes on Iran and disruptions in shipments through the Strait of Hormuz, one of the world’s most critical oil transit routes.
Iran has effectively closed the Strait of Hormuz, disrupting the movement of oil, gas, fertilisers and petroleum products, triggering concerns over global energy supplies. Fuel retailers had earlier kept pump prices unchanged despite rising input costs, a move the government said was aimed at protecting consumers from inflationary pressure.