Petrol, Diesel Prices Hiked Again Amid West Asia Conflict

Petrol and diesel prices were increased again on Saturday, marking the third hike in less than 10 days as global crude oil prices continue to surge amid the ongoing West Asia conflict and disruptions around the Strait of Hormuz. Petrol prices were raised by up to 87 paise per litre, while diesel prices increased by as much as 91 paise per litre across major cities. In Delhi, petrol now costs Rs 99.51 per litre, up from Rs 98.64, while diesel prices rose from Rs 91.58 to Rs 92.49 per litre.

Petrol prices in metro cities (May 23)

City

Price (Rs /litre)

Change

Delhi

Rs 99.51

+0.87

Kolkata

Rs 110.64

+0.94

Mumbai

Rs 108.49

+0.90

Chennai

Rs 105.31

+0.82

Diesel prices in metro cities (May 23)

City

Price (Rs /litre)

Change

Delhi

Rs 92.49

+0.91

Kolkata

Rs 97.02

+0.95

Mumbai

Rs 95.02

+0.94

Chennai

Rs 96.98

+0.87

Note: Fuel prices vary from state to state depending on incidence of VAT.

Why petrol and diesel prices are rising

The latest hikes come as India faces mounting pressure from soaring global crude oil prices triggered by the West Asia conflict and disruptions to shipping routes through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints. Global crude oil prices, which were hovering around $70-72 per barrel before the conflict, surged past $120 at one point and are currently trading in the $104-110 range. India’s crude oil basket has averaged nearly $113-114 per barrel in recent months, compared to around $69 per barrel in February. India imports nearly 90 per cent of its crude oil requirements, making domestic fuel prices highly sensitive to international market movements.

Fuel prices had remained unchanged for years

Retail petrol and diesel prices had largely remained unchanged since April 2022, except for a one-time Rs 2 per litre cut announced in March 2024 ahead of the Lok Sabha elections. State-run oil marketing companies, Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited had suspended daily price revisions in 2022 to shield consumers from the global crude shock after Russia’s invasion of Ukraine. However, officials say the current surge in oil prices has pushed public sector fuel retailers into heavy losses. Oil minister Hardeep Singh Puri recently said the three state-run fuel retailers were together losing nearly Rs 1,000 crore every day while cumulative under-recoveries had reached close to Rs 1.98 lakh crore. He had also warned that if fuel prices were not revised despite elevated crude prices, losses of nearly Rs 1 lakh crore in a single quarter could wipe out the companies’ annual earnings. Reserve Bank of India governor Sanjay Malhotra had earlier indicated that petrol and diesel prices may eventually need further revisions if the West Asia conflict continues for a prolonged period. Despite the global turmoil, the government has said India currently has sufficient fuel reserves to avoid immediate supply disruptions. India has also increased naval deployment in the Persian Gulf region and is preparing to resume shipments through the Strait of Hormuz under naval protection to secure energy supplies from the Middle East. Meanwhile, Prime Minister Narendra Modi has urged citizens to reduce fuel consumption and conserve foreign exchange amid rising oil bills and pressure on the rupee.