Petrol and diesel prices may increase by around Rs 4–5 per litre, while domestic LPG cylinders could see a hike of about Rs 40–50, as the government weighs a price hike amid surging global crude oil prices driven by the West Asia war, top government sources said.
If approved, this would be the first increase in petrol and diesel prices in nearly four years, with retail rates largely frozen since 2022.
The Likely Hike
| Commodity | Likely Increase |
|---|---|
| Petrol | Rs 4-5 per litre |
| Diesel | Rs 4-5 per litre |
| Domestic LPG Cylinder | Rs 40-50 per cylinder |
Why the Hike?
| Factor | Impact |
|---|---|
| West Asia War | Sharp rise in global crude oil prices |
| Supply Disruptions | Concerns over shipping risks and prolonged instability |
| OMC Losses | Oil marketing companies absorbing losses with unchanged retail prices |
| Fiscal Burden | Elevated crude prices limiting government’s ability to subsidize |
The trigger is the sharp rise in global crude oil prices, driven by the West Asia conflict. Concerns over potential supply disruptions, shipping risks, and prolonged instability have pushed up benchmark crude prices in recent weeks, increasing input costs for oil marketing companies (OMCs).
With retail fuel prices unchanged, oil companies have been absorbing losses, leading to under-recoveries. Elevated crude prices are also adding to the government’s fiscal burden, limiting its room to cushion consumers through subsidies or tax cuts.
Decision Timeline
| Aspect | Details |
|---|---|
| Current Status | No final decision taken |
| Expected Timeline | Within 5-7 days |
| Government’s Focus | Balancing OMC stress with inflation concerns |
Sources said the government is closely monitoring the evolving situation in West Asia and its impact on global energy markets. Internal discussions are underway, with multiple options being evaluated, including the timing and extent of any increase.
Officials said the government is trying to strike a balance between addressing the financial stress on oil companies and ensuring that any hike does not significantly push up inflation.
Impact on Consumers
Any increase in fuel and LPG prices is expected to have a broader impact on:
- Household budgets (cooking gas costs)
- Transportation costs (fuel for personal and commercial vehicles)
- Inflation (ripple effects on goods and services)
What’s Next?
IndiaToday.in had earlier reported a strong likelihood of a fuel price hike, given mounting pressure on OMCs. The government had recently ruled out the possibility of an increase immediately after the conclusion of the assembly polls. However, with global crude prices remaining elevated, a decision is now expected soon.
