New Delhi, 19 May

Petrol and diesel prices were raised by about 90 paise per litre on Tuesday - the second increase in less than a week - as state-run fuel retailers moved to narrow mounting losses triggered by a sharp surge in global crude oil prices following the Iran conflict.

Petrol price in New Delhi rose to Rs 98.64 per litre from Rs 97.77, while diesel rate increased to Rs 91.58 from Rs 90.67 a litre, according to industry sources. The latest increase follows the Rs 3-per-litre hike on Friday - the first fuel price revision in more than four years.

The back-to-back increases come after global crude oil prices surged more than 50 per cent since late February following US-Israeli strikes on Iran and disruptions to shipments through the Strait of Hormuz, a critical global oil transit route.

Fuel retailers had kept pump prices low despite rising input costs, a move the government said was aimed at shielding consumers from inflation. Opposition parties, however, accused the government of delaying price revisions until after key state elections.

Friday's increase came after the ruling Bharatiya JanataParty (BJP) expanded its electoral footprint by winning three of the five State and UT elections, including West Bengal.

Despite the hikes, fuel retailers continue to absorb significant losses. Petroleum Ministry's Joint Secretary, Sujata Sharma said on Monday that the 15 May increase reduced losses by about a fourth, but state-run oil firms were still losing around Rs 750 crore per day.

According to Crisil, oil marketing companies were losing about Rs 10 per litre on petrol and Rs 13 per litre on diesel even after the earlier hike.

Petrol and diesel prices are now at their highest levels since May 2022. Rates had remained frozen since April 2022 except for a Rs 2-per-litre cut in March 2024 ahead of national elections.

Prices vary across states due to local taxes.

Petrol in Mumbai now costs Rs 107.59 per litre and diesel Rs 94.08, while Kolkata prices rose to Rs 109.70 and Rs 96.07, respectively. In Chennai, petrol is priced at Rs 104.49 and diesel at Rs 96.11.

The fuel price increases come amid broader efforts by the government to contain India’s oil import bill and reduce fuel consumption.

Prime Minister Narendra Modi last week urged citizens and government departments to conserve fuel, encourage remote working and reduce non-essential travel as elevated energy prices pressure foreign exchange reserves and threaten to widen the current account deficit.

Several State governments have already directed departments to curb travel and reduce office attendance.

Compressed natural gas (CNG) prices have also risen twice within this period, including a Re 1-per-kg increase on Sunday after a Rs 2 hike on May 15 in cities such as Delhi and Mumbai. Private retailers had moved ahead of state-run firms in raising prices.

Nayara Energy increased petrol and diesel prices by up to Rs 5 and Rs 3 per litre respectively in March, while Shell raised petrol price by Rs 7.41 and diesel by Rs 25 per litre from 1 April.

Industry officials said the latest revisions appeared calibrated to partially ease pressure on oil companies without triggering a sharp inflation shock, though they acknowledged the increases would add to price pressures.

India's retail inflation accelerated to 3.48 per cent in April from 3.40 per cent in March, while wholesale inflation climbed to a 42-month high of 8.3 per cent, driven largely by higher fuel and energy costs.

Opposition Congress sharpened their attack on the government over rising fuel prices and inflation, warning that the latest increases were only the start of broader price pressures facing consumers.

"Abhi toh ye angdai hai, aage aur mehangai hai" ("This is just the beginning, more inflation lies ahead"), the party said in a post on X attaching a news clip of petrol and diesel prices being raised for the second time in less than a week.