Petrol and diesel prices were increased by around 90 paise per litre on Tuesday, marking the second hike in less than a week after state-run oil companies resumed revisions following a nearly four-year freeze.
In New Delhi, petrol prices rose to Rs 98.64 per litre from Rs 97.77, while diesel increased to Rs 91.58 from Rs 90.67.
The latest revision follows a Rs 3 per litre hike announced on Friday, the first increase in over four years, as soaring global crude oil prices, triggered by the Iran conflict, forced fuel retailers to pass on a portion of mounting losses after months of holding prices steady.
Fuel prices vary across states due to differences in value-added tax (VAT).
Compressed natural gas (CNG) prices have also seen consecutive increases. On May 15, rates were raised by Rs 2 per kg in cities including Delhi and Mumbai, followed by another Re 1 per kg hike on Sunday.
Global crude oil prices have surged over 50 per cent since US-Israeli strikes on Iran on February 28 and Tehran’s retaliation disrupted shipments through the Strait of Hormuz, a critical global oil transit route.
Despite rising crude prices, retail fuel rates had remained frozen at two-year-old levels, with the government saying the move was intended to protect price-sensitive consumers from global energy shocks.
Opposition parties, however, alleged political motivations, citing the timing of key state elections.
Friday’s Rs 3 per litre increase came after the completion of state polls, in which the ruling Bharatiya Janata Party (BJP) expanded its influence by winning three of five states, including West Bengal. Industry estimates suggest the increase covered only about a fifth of the required adjustment to align pump prices with costs.
On Monday, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, had stated that the May 15 hike had cut losses by a fourth and that oil companies were still incurring about Rs 750 crore a day loss.
Following Tuesday’s increase, petrol and diesel prices have reached their highest levels since May 2022. Rates had remained unchanged since April 2022, except for a one-time Rs 2 per litre reduction on both fuels in March 2024 ahead of the Lok Sabha elections.
Among metros, petrol in Mumbai now costs Rs 107.59 per litre and diesel Rs 94.08. In Kolkata, petrol is priced at Rs 109.70 and diesel at Rs 96.07, while in Chennai, petrol has increased to Rs 104.49 and diesel to Rs 96.11 per litre.
The back-to-back fuel hikes come after excise duty cuts announced in March and amid government measures aimed at reducing fuel consumption and containing the oil import bill.
Prime Minister Narendra Modi last week urged fuel conservation, increased work-from-home practices and reduced travel to ease pressure from higher energy costs on India’s foreign exchange reserves and current account deficit.
Several state governments have also directed departments to limit travel, reduce physical meetings and operate with lower office attendance.
(With inputs from PTI)
