Petrol, Diesel Prices Hiked Again By 90 Paise In Second Increase In A Week

Petrol and diesel prices were increased by about 90 paise per litre on Tuesday, marking the second hike within a week as state-run oil marketing companies continued to unwind a nearly four-year-long freeze on fuel price revisions.

With the latest revision, petrol in New Delhi rose to Rs 98.64 per litre from Rs 97.77, while diesel climbed to Rs 91.58 per litre from Rs 90.67, according to industry sources. In Hyderabad, petrol prices increased to around Rs 111.88 per litre , while diesel rose to nearly Rs 99.95 per litre . The move comes just days after a sharper increase of Rs 3 per litre on Friday, which was the first major upward revision in over four years.

The recent series of price hikes follows the end of a prolonged freeze on retail fuel rates that had been in place since April 2022, except for a brief reduction ahead of national elections. Industry officials said the freeze was largely maintained to shield consumers from global volatility and inflationary pressures, but mounting losses forced a gradual correction.

Prices across major metros continue to vary due to differences in state-level VAT structures . In Mumbai, petrol is now priced at Rs 107.59 per litre and diesel at Rs 94.08. In Kolkata, petrol stands at Rs 109.70 and diesel at Rs 96.07, while in Chennai, rates have risen to Rs 104.49 for petrol and Rs 96.11 for diesel.

The increase in domestic fuel prices has been driven largely by a sharp rise in global crude oil prices , which have surged following geopolitical tensions and disruptions in supply chains, including concerns over key shipping routes such as the Strait of Hormuz. Analysts said crude oil has risen significantly in recent months, placing sustained pressure on India’s import-dependent energy sector.

Industry sources indicated that despite the recent hikes, oil marketing companies are still absorbing substantial losses. Estimates from rating agency Crisil suggest under-recoveries of about Rs 10 per litre on petrol and Rs 13 per litre on diesel even after the latest revision.

Officials from the Ministry of Petroleum and Natural Gas had earlier noted that state-run fuel retailers were collectively losing around Rs 750 crore per day , though the gap has narrowed after the initial price correction last week.

The price freeze had been widely viewed as a policy tool to manage inflation and protect consumers, particularly during sensitive political periods. However, critics have argued that it also delayed necessary adjustments in line with international crude trends.

Prime Minister Narendra Modi has recently urged citizens to adopt fuel conservation measures , including reduced travel, work-from-home practices, and efficient energy usage, as India faces pressure on its import bill and external balances.

In addition to petrol and diesel, related energy products have also seen price adjustments in recent months. Compressed natural gas (CNG) rates were increased twice in May, while domestic LPG prices were raised earlier this year, although they remain below cost recovery levels, resulting in continued losses for oil companies.

Private fuel retailers have also revised prices upward. Companies such as Nayara Energy and Shell have implemented significant increases in retail fuel rates in recent months, further reflecting global market pressures.

Economists said the latest fuel price hikes are likely to have a marginal but visible impact on inflation , particularly in transport and logistics costs. India’s retail inflation edged up slightly in April, while wholesale price inflation surged to a multi-year high, driven largely by energy costs.