Petrol prices breached the ₹100-a-litre mark in the capital on Monday after state-owned oil companies effected the fourth hike in retail fuel rates in 11 days. According to reports from The Times of India, petrol prices were raised by another ₹2.61 to ₹102.12 a litre to cut losses from selling auto fuels below market cost. Diesel prices also rose by ₹2.71 to ₹95.20 a litre, with the cumulative increase in petrol and diesel prices in Delhi now standing at ₹7.38 and ₹7.53 a litre respectively. This represents the sharpest short-window fuel price revision in India since 2022, with the first hike in nearly four years coming on May 15, 2026. 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 government indicated that further hikes may be coming as the cumulative under-recoveries on petrol, diesel and LPG were now slightly below ₹600 crore a day. As reported by The Times of India, after the first hike of ₹3 a litre on May 15 amid the current geopolitical situation that disrupted energy supplies and triggered a global surge in crude prices, the government had said under-recoveries had declined 25% to ₹750 crore a day. Union finance minister Nirmala Sitharaman defended the price hike, stating that the government had shielded consumers for 75 days or so by over ₹1 lakh crore annually by slashing excise by ₹10 per litre. According to estimates, Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) were together incurring losses exceeding ₹1,000 crore per day before the latest hikes.
According to The Times of India, the quantum of the hike varies as value-added tax structures differ across states. In Mumbai, petrol now costs ₹111.21 per litre while diesel is priced at ₹97.83. In Chennai, petrol costs ₹107.77 per litre and diesel ₹99.55, while in Kolkata, petrol costs ₹113.51 per litre and diesel ₹99.82. The government noted that globally, the increase in petrol prices is 22% and diesel 27%, but in India it is much lower — 7.7% on petrol and 8.6% on diesel. CNG prices in Delhi were also revised upward by Re 1 per kg on Saturday, taking the rate to ₹81.09 per kg.
The ₹7.38 per litre increase in petrol and ₹7.53 per litre in diesel over 11 days represents a 7 to 8 percent fuel cost increase for individual consumers and similar increases in trucking costs. Economists estimate that every ₹5 per litre petrol hike adds approximately 25 to 30 basis points to headline CPI inflation, with the 11-day cumulative hike potentially adding 35 to 45 basis points to India's inflation rate. The RBI's rate cut path has become more challenging, with the probability of near-term rate cuts dropping sharply due to the fresh upward pressure from fuel costs and a weakening rupee at ₹96.26. Higher diesel prices are expected to increase transportation and logistics costs, which could push up prices of essential commodities such as milk, vegetables, bread and other daily-use items. Sourav Mitra, Partner – Oil and Gas at Grant Thornton Bharat, noted that the recent hikes may offer only partial relief to oil companies, with crude prices likely to remain elevated above USD 90 per barrel even if the Middle East situation stabilises.
