Fourth fuel hike in 11 days
Petrol and diesel prices were revised upward again amid mounting global crude oil pressure
Petrol and diesel prices were increased once again on Monday, marking the fourth fuel price hike in just 11 days amid the ongoing Iran war and rising global crude oil prices. With the latest revision, petrol prices in Delhi have crossed the Rs 100 per litre mark for the first time in nearly four years.
Petrol prices were hiked by Rs 2.61 per litre, while diesel prices went up by Rs 2.71 per litre. Following the latest increase, petrol in Delhi now costs Rs 102.12 per litre, while diesel is priced at Rs 95.20 per litre.
This is the fourth consecutive fuel price hike since May 16. Earlier on Saturday, petrol prices were raised by 87 paise per litre and diesel by 91 paise. Before that, prices had already been increased by nearly Rs 3 per litre earlier this month. CNG prices in Delhi were also revised upward by Re 1 per kg on Saturday, taking the rate to Rs 81.09 per kg.
The latest increase comes amid mounting pressure on global oil markets due to the ongoing conflict involving Iran and continued disruption in the Strait of Hormuz, one of the world’s most critical oil shipping routes. The crisis has sharply impacted crude oil supply chains, causing international oil prices to surge.
For several weeks, India’s public sector oil marketing companies (OMCs) continued selling petrol and diesel at older rates despite purchasing crude oil at significantly higher prices. However, after months of sustained losses, the companies were forced to pass on part of the burden to consumers.
According to estimates, Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) were together incurring losses exceeding Rs 1,000 crore per day.
Speaking on the situation, Sourav Mitra, Partner – Oil and Gas at Grant Thornton Bharat, said the recent hikes may offer only partial relief to oil companies.
“The recent back-to-back price hikes will offer partial relief to OMCs, but not a full cushion. Even if the Middle East situation stabilises, it will take time for risks around the Strait of Hormuz to fully ease, keeping crude prices elevated — likely above USD 90 per barrel. Combined with a weakening rupee, this continues to pressure OMC margins, and they could still face under-recoveries,” he said.
He further added that more calibrated fuel price revisions may be necessary in the coming weeks.
“Going forward, some calibrated price revisions may be required. The government will need to balance OMC financial health against the impact on consumers,” Mitra added.
Fuel prices in India had remained largely unchanged since April 2022. In fact, rates were cut by Rs 2 per litre ahead of the 2024 Lok Sabha elections. The latest hikes therefore mark a significant shift after a prolonged period of stability in domestic fuel prices.
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