Winning Bizness Desk
Mumbai.Oil marketing companies on Sunday raised petrol prices by ₹2.61 per litre and diesel prices by ₹2.71 per litre, marking the fourth hike in fuel rates this month. Following the increase, petrol in Delhi now costs ₹102.12 per litre, while diesel is being sold at ₹95.20 per litre. The latest revision comes amid rising crude oil prices in the international market and growing pressure on government-run oil companies facing heavy losses. Officials said the rise was unavoidable as global crude rates have crossed 100 dollars per barrel after tensions between Iran and the United States escalated sharply. Higher fuel prices are now expected to affect household budgets as transportation and logistics costs may rise across the country. Essential items transported from other states could become more expensive in the coming weeks.
- Truck and tempo freight charges may increase
- Vegetable, fruit and ration prices could rise
- School bus and auto fares may become costlier
- Farmers may spend more on tractors and pump sets
Fuel price pressure spreads across sectors
The Centre said state-owned oil firms were still suffering losses despite repeated fuel price revisions. Petroleum Ministry Joint Secretary Sujata Sharma stated that daily losses of oil companies have now reduced to nearly ₹600 crore. Before fuel prices started increasing on May 15, these companies were reportedly losing around ₹1,000 crore every day on the sale of petrol, diesel and LPG cylinders.
According to government estimates, public sector firms such as Indian Oil, Bharat Petroleum and Hindustan Petroleum were collectively losing nearly ₹30,000 crore every month due to expensive crude oil imports. India imports around 90% of its crude oil requirement, making domestic fuel pricing highly sensitive to global market conditions and dollar exchange rates.
Uttar Pradesh records highest petrol consumption
Data released by the government showed Uttar Pradesh remained the country’s largest petrol-consuming state during the financial year 2025-26. The state consumed nearly 5,157.8 thousand metric tonnes of petrol during the period. Lakshadweep recorded the lowest fuel usage with only 1.1 thousand metric tonnes consumed.
Officials said rising fuel demand in populous states continues to put pressure on the supply chain and pricing mechanism. Industry experts believe that if international crude prices remain elevated for a longer period, further increases in domestic fuel prices cannot be ruled out.
Key reasons behind latest fuel hike:
- Crude oil crossed 100 dollars per barrel
- Iran-US conflict disrupted global oil markets
- Rupee value against dollar added pressure
- Oil firms attempted to reduce mounting losses
How petrol and diesel prices are fixed
Fuel prices in India are revised daily under the dynamic pricing system followed by oil marketing companies. New rates are updated every morning at 6 am based on global crude oil prices and currency fluctuations. Experts said the final retail price paid by consumers becomes three to four times higher than the base crude oil cost after taxes and other charges are added.
The pricing structure includes several components. First comes the crude oil cost, followed by refinery expenses and company margins. After that, the Centre imposes excise duty and road cess. Dealers are then given commission, while state governments levy Value Added Tax or local sales tax. Since VAT differs from state to state, fuel prices vary in cities like Delhi, Mumbai, Kolkata and Chennai.
Election-time relief had kept prices stable
Petrol and diesel prices had largely remained unchanged since March 2024 after the government reduced rates by ₹2 per litre ahead of the Lok Sabha elections. The Centre had also slashed special excise duty by ₹10 each on petrol and diesel on March 27 to prevent a steep rise in retail prices.
Following the reduction, excise duty on petrol had come down from ₹13 per litre to ₹3, while diesel duty was reduced from ₹10 to zero under the special excise category. Total central excise duty on petrol had dropped from ₹21.90 to ₹11.90 per litre. In diesel, the duty was reduced from ₹17.8 to ₹7.8 per litre.
Officials said the government had absorbed part of the burden to shield consumers from inflation, but prolonged global uncertainty and rising crude prices eventually forced oil companies to increase rates again.
