Petrol and diesel rates hit highest level since 2022 after fresh hike

Petrol and diesel prices were increased by about 90 paise per litre on Tuesday, marking the second hike in fuel rates in less than a week after state-run oil companies ended a nearly four-year freeze on price revisions.

The latest increase pushed petrol prices in New Delhi to Rs 98.64 per litre from Rs 97.77, while diesel rose to Rs 91.58 from Rs 90.67, according to industry sources.

The move comes days after petrol and diesel prices were raised by Rs 3 per litre on Friday, the first increase in more than four years. The hike followed a sharp rise in global crude oil prices after the Iran war disrupted supplies and increased pressure on oil companies.

Fuel prices differ across states because of variations in value-added tax (VAT).

Compressed natural gas (CNG) prices have also risen this month. On May 15, CNG prices were increased by Rs 2 per kg in cities including Delhi and Mumbai. Prices were again raised by Re 1 per kg on Sunday.

Global crude oil prices have surged by more than 50 per cent since US-Israeli strikes on Iran on February 28 and Tehran’s retaliation, which disrupted flows through the Strait of Hormuz, a major route for global oil shipments.

Despite rising crude prices, retail fuel rates had remained frozen at nearly two-year-old levels. The government had said the freeze was aimed at protecting consumers from higher global energy costs, while opposition parties alleged political reasons as several states headed into elections.

The Rs 3 per litre increase announced on Friday came after the completion of state elections in which the ruling Bharatiya Janata Party (BJP) won three of five states, including West Bengal.

Industry sources said the earlier increase covered only about one-fifth of the hike required to fully align pump prices with costs.

On Monday, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said the May 15 increase had reduced losses by about a fourth, but oil companies were still losing around Rs 750 crore a day.

Following Tuesday’s revision, petrol and diesel prices are now at their highest levels since May 2022.

Fuel rates had remained unchanged since April 2022, except for a one-time reduction of Rs 2 per litre each on petrol and diesel in March 2024 ahead of the Lok Sabha elections. The last increase before this month was in April 2022.

In Mumbai, petrol now costs Rs 107.59 per litre and diesel Rs 94.08 per litre. In Kolkata, petrol costs Rs 109.70 and diesel Rs 96.07 per litre, while in Chennai, petrol prices have risen to Rs 104.49 and diesel to Rs 96.11 per litre.

Industry sources said the latest increase remains modest compared with the jump in global crude oil prices and that retailers continue to absorb substantial losses.

According to Crisil, after the May 15 increase, losses stood at around Rs 10 per litre on petrol and Rs 13 per litre on diesel.

The latest fuel price increases come after excise duty cuts announced in March and amid government measures aimed at reducing fuel consumption and containing India’s oil import bill.

Prime Minister Narendra Modi last week urged fuel conservation, increased work-from-home practices and reduced travel as rising energy prices put pressure on India’s foreign exchange reserves and threatened to widen the current account deficit for a third consecutive year.

Several state governments have already directed departments to reduce travel, avoid physical meetings and operate with lower office staffing.

Private fuel retailers had already revised prices earlier. Nayara Energy raised petrol prices by Rs 5 per litre and diesel by Rs 3 per litre in March, while Shell increased petrol prices by Rs 7.41 and diesel by Rs 25 per litre from April 1. In Bengaluru, Shell currently sells petrol at Rs 119.85 per litre and diesel at Rs 123.52 per litre.

Domestic LPG cooking gas prices were also increased in March by Rs 60 per cylinder, though rates remain below actual cost levels. Oil companies are currently losing Rs 674 on every 14.2-kg LPG cylinder.

Industry sources said the latest increase appears calibrated to partially reduce pressure on oil companies without triggering a major inflation shock.

However, they added that the increase is expected to have some impact on inflation.

India’s retail inflation, measured by the Consumer Price Index (CPI), rose to 3.48 per cent in April 2026 from 3.40 per cent in March. Wholesale price inflation (WPI) climbed to 8.3 per cent, the highest level in 42 months, driven largely by rising fuel and energy prices amid elevated global crude oil rates.