India’s state-owned oil marketing companies — , and Hindustan Petroleum — raised petrol and prices by ₹3 per litre on Friday, ending a 49-month freeze on retail fuel prices. In Delhi, petrol now costs ₹97.77 per litre and diesel ₹90.67. Mumbai petrol stands at ₹106.68, Kolkata at ₹108.74 and at ₹103.67.
The hike comes as global crude surged from around $69 per barrel in February to above $120, driven by the West Asia conflict and supply disruptions in the Strait of Hormuz. Brent futures were trading at $106.91 on Friday morning, up 1.13 per cent. On the MCX, June crude futures were at ₹9,445, up 1.02 per cent.
Analysts, however, caution the revision is insufficient. ICRA’s Prashant Vasisht said OMCs still incur a loss of “…about ₹500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike,” at crude levels of $105–110 per barrel. Arun Kailasan of Geojit Investments put cumulative under-recoveries at ₹1,98,000 crore, noting break-even would require a correction of ₹10 per litre for petrol and ₹15 for diesel.
Dr Manoranjan Sharma, Chief Economist at Infomerics Ratings, flagged the broader macro risk, noting that for India — which imports nearly 85 per cent of its crude — the hike will raise transportation and production costs and increase prices of essential goods, while a weakening rupee further compounds import expenses.
Jateen Trivedi of LKP Securities said the hike signals the government’s intent to manage fuel subsidies and protect forex reserves. Ajit Mishra of Religare Broking warned of intensifying inflationary pressure, with higher logistics costs expected to filter through to household budgets.
Kailasan described the ₹3 revision as “…less like a solution and more like an opening step in a staggered strategy,” a view consistent with Sharma’s observation that this crisis is “…both an economic and strategic challenge.”
Khushi Mistry, Research Analyst at Bonanza, offered a market-focused read, saying the hike is “…directionally correct but financially inadequate, and the muted Street reaction is rational.” She added that a sustained rerating of OMC stocks would require at least two of three conditions — Brent falling back below $95, a second tranche of cumulative hikes of ₹4–5 per litre, or a meaningful LPG compensation top-up. “Until then, the stocks trade as a high-beta short proxy on the West Asia conflict,” she said.