New Delhi: After over two years of putting prices on hold, state-run oil marketing companies (OMCs) on Friday raised prices of petrol and diesel around ₹3 and a litre.
The price hike comes 16 days after state assembly elections in Assam, Kerala, Tamil Nadu, and West Bengal ended. Polls in Assam and Kerala were held on 9 April, in Tamil Nadu and the first phase of voting in West Bengal on 23 April, and ended in 29 April with the second phase of polling in West Bengal.
With the latest price hike, are sold at ₹97.77 and ₹ ₹90.67 per litre respectively in the national capital. In the other key metros of Kolkata and Chennai, petrol prices will be ₹108.74 and ₹103.67, higher by ₹3.29 and ₹2.87 respectively from ₹105.45 and ₹100.80.
Similarly, the price of diesel in these cities stands at ₹95.13 and ₹95.25, higher by ₹3.11, and ₹2.86 per litre respectively.
According to the government, the public sector OMCs — Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd — have been losing around ₹20 per litre on the sale petrol and around ₹100 per litre on diesel sales due to high oil prices and unchanged retail prices in India. According to other estimates the under-recovery on diesel sales, is however, much less
In a bid to avert an immediate price hike, the finance ministry on 27 March, reduced the by ₹10 per litre.
Private refiners and oil marketing companies such as Nayara and Shell that operate around 8,500 of the more than 100,000 petrol stations in India, had raised fuel prices earlier.
In March Nayara had raised petrol prices by ₹5 per litre and diesel by ₹3 a litre. In Haryana, petrol at Nayara outlets is now around ₹100.71 per litre and diesel about ₹91.21 per litre. In Uttar Pradesh, Nayara’s petrol is priced at ₹100.20 per litre and diesel at ₹91.10 per litre. Prices vary across states due to differences in value-added tax.
Shell on 1 April raised petrol prices by ₹7.41 per litre and the price of diesel by ₹25 a litre. In Bengaluru, Shell is selling petrol at ₹119.85, while diesel is sold for ₹123.52 a litre.
Prices unchanged since 2024
The government had so far maintained that despite a surge in global oil prices following the and the consequent increase in pump prices in other countries, including neighbouring countries of Pakistan, Nepal and Sri Lanka, Indian customers have not witnessed a price hike in the case of regular petrol and diesel.
Prices of regular petrol and diesel were unchanged since March 2024. They were last reduced by ₹2 per litre ahead of the Lok Sabha elections in 2024. Although, technically fuel prices are deregulated and oil marketing companies can revise prices daily on the basis of the fortnightly average of crude oil prices, given the politically sensitive nature of the commodity, they remain largely unchanged.
According to a recent estimate by ratings agency ICRA, if crude prices remain in the range of $120-125 per barrel, marketing margins on sale of petrol would move into negative territory: they would lose ₹14 a litre of petrol and ₹18 on each litre of diesel. In petroleum marketing, marketing margin represents the difference between the purchase cost and the final sale price, directly affecting profitability for OMCs.
Although OMCs are currently facing losses or under-recovery, they also profited when global crude prices were largely subdued in the past couple of years, and retail fuel prices remained largely stagnant.
Sujata Sharma, joint secretary, ministry of petroleum and natural gas on 8 May had told reporters that OMCs are incurring losses of around ₹30,000 crore in a month on the sale of petrol, diesel and LPG amid high crude prices.
Increase in prices “inevitable”
The department of economic affairs under the finance ministry in its monthly economic review for April had noted that while some economies are yet to pass on the increase in prices to the consumers, such a move is “inevitable”.
“Some countries have begun to allow prices to be passed on to end-users — households and businesses. Some are yet to do so. But it is inevitable. During a period of supply disruption, demand has to moderate; failing that, countries will have to pay a much higher price for energy supplies. India’s crude oil basket averaged USD 113 per barrel in March, and it is just under USD 115 per barrel for April until the 24th” it said.
As The Indian basket of crude oil which represents a derived basket comprising of Sweet grade (Brent Dated) and Sour grade (Oman & Dubai average) of crude oil imported by Indian refineries during each month, stood at $109.31/bbl on Friday.
Inflationary impact likely
This increase in prices would also have a macroeconomic impact due to an eventual rise in inflation and impact on GDP growth.
An estimate by Bank of Baroda shows that an increase of $1 per barrel in oil prices for a year translates into an increase of ₹16,000 crore in the annual import bill of the country. In fiscal 2026, India’s oil import bill was $121.8 billion, compared to $137.2 billion in FY25 due to low oil prices for most part of the year.
on 10 May urged citizens the rationalize the use of petrol and diesel in order to save foreign exchange.
“Petrol, diesel have become very expensive globally. It has increased significantly. It is the responsibility of all of us that the foreign currency spent on oil, should be saved by saving petrol and diesel,” he said, while asking people to use public transport, work from home.