State-owned oil marketing companies have raised petrol and diesel prices by around Rs 3 per litre, marking the first increase in over four years, as state-run fuel retailers face mounting pressure from rising global energy prices linked to the conflict in West Asia.
According to data available on Indian Oil’s website, petrol in Delhi now costs Rs 97.77 per litre, up from Rs 94.77 earlier. Diesel prices in the national capital have risen to Rs 90.67 per litre from Rs 87.67 previously. In Mumbai, petrol is now priced at Rs 106.68 per litre, while diesel costs Rs 93.14 per litre.
Fuel prices vary across states due to differences in local taxes and levies. Bharat Petroleum and Hindustan Petroleum generally mirror price revisions made by Indian Oil.
The hike comes amid concerns over under-recoveries at OMCs, which have held petrol and diesel prices steady since April 2022 despite a sharp rise in global crude and fuel prices following the escalation of tensions in West Asia.
Petroleum and Natural Gas Minister Hardeep Singh Puri had earlier hinted at a possible price increase, saying OMCs were estimated to be losing between Rs 1,000 crore and Rs 1,200 crore daily on fuel sales.
According to estimates cited by the minister, the three state-run retailers could have faced combined losses of nearly Rs 1 lakh crore in the first quarter of the current financial year if prices had remained unchanged.
Alongside petrol and diesel, compressed natural gas (CNG) prices were also raised.
In Delhi, CNG prices have reportedly gone up by Rs 2 per kg to Rs 79.09 per kg from Rs 77.09 earlier. A day earlier, CNG prices in Mumbai were similarly increased by Rs 2 per kg, taking prices across the Mumbai Metropolitan Region to Rs 84 per kg.
The fuel price hike is expected to weigh on consumer sentiment, particularly in the entry-level car and motorcycle segments, where buyers are highly sensitive to running costs.
Prime Minister Narendra Modi on Sunday appealed for the conservation of petroleum products as part of broader measures to protect India’s foreign exchange reserves amid the ongoing West Asia crisis.
India imports nearly 90% of its crude oil requirements, leaving the economy vulnerable to sharp swings in global oil prices. Reports had indicated that, before the latest revision, OMCs were losing around Rs 14 per litre on petrol sales and nearly Rs 42 per litre on diesel.
The government had, in late March, cut excise duty on petrol and diesel by Rs 10 per litre to reduce the burden on consumers and provide some relief to OMCs. The Petroleum Ministry had said the excise duty reduction would result in the government foregoing revenue of around Rs 14,000 crore every month. Without the duty cut, a larger part of the burden would have fallen on the three fuel retailers.