India Raises Petrol and Diesel Prices by ₹3

The Centre broke a nearly four-year silence on fuel prices Friday hiking petrol and diesel by ₹3 per litre each. The Iran war has pushed global crude above $113 a barrel, bleeding state oil firms dry at over ₹1,000 crore daily.

India Finally Raises Fuel Prices After Four Years of Frozen Rates

The Centre on Friday broke one of the longest fuel price freezes in India’s history hiking petrol and diesel rates by ₹3 per litre each across the country. State-owned oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) had held retail prices unchanged for nearly four years. The revised prices took effect immediately, with no transition window given to consumers.

In Delhi, petrol now costs ₹97.77 per litre up from ₹94.77. Diesel rose from ₹87.67 to ₹90.67. Mumbai motorists now pay ₹106.68 per litre for petrol a jump of ₹3.14. Diesel in Mumbai climbed ₹3.11 to reach ₹93.14. Kolkata petrol touched ₹108 per litre, while Chennai rates rose to ₹103.90.

Iran War Drove Crude Oil Prices 50% Higher

The fuel revision comes directly off the back of the Iran-US conflict which broke out on February 28, 2026. That war severely disrupted energy supply chains across West Asia, particularly around the Strait of Hormuz. India’s crude oil import basket averaged around USD 69 per barrel in February. In the months that followed, it surged to USD 113–114 per barrel a rise of over 50 per cent. Global Brent crude crossed USD 110 per barrel, pushing India’s fuel import bill sharply higher.

Oil Firms Were Bleeding Over ₹1,000 Crore Every Single Day

The three state-owned oil companies had held prices steady for 11 weeks after the conflict began absorbing massive losses to shield consumers. But the financial hit became impossible to sustain. The combined under-recovery on petrol, diesel and cooking gas LPG reached ₹1,000 crore to ₹1,200 crore daily. ICRA Senior Vice President Prashant Vashisht explained the scale of the crisis: “The oil marketing companies are incurring substantial losses on the sale of auto fuels and domestic LPG owing to high international crude oil and product prices. ICRA estimates that at crude prices of $120–$125 per barrel, oil marketing companies incur losses of around ₹1,000 crore per day on the sale of auto fuels and domestic LPG.”

Analysts noted the ₹3 per litre hike is actually far short of what companies need. Some estimated a ₹15–20 per litre increase is needed for oil firms to fully stop bleeding money. The hike represents roughly one-tenth of the total correction needed to account for the global price surge.

Prices Were Already Frozen Since April 2022

Fuel prices in India have effectively been frozen since April 2022 when daily revisions were suspended after the Russia-Ukraine conflict caused wild swings in global crude markets. A one-time ₹2 per litre reduction came in March 2024, just before the Lok Sabha elections. No major upward revision had happened since. That prolonged freeze despite an ever-changing global oil landscape led to one of the worst under-recovery cycles India’s oil sector has seen in years.

CNG Also Gets Costlier: Transport and Households Brace for Impact

Along with petrol and diesel, CNG prices rose by ₹2 per kg adding pressure on auto-rickshaws, cabs and city bus services. In the Mumbai Metropolitan Region, Mahanagar Gas Limited had already revised CNG prices a day earlier, effective May 14, 2026. The twin blow of higher fuel and gas prices is expected to ripple into transportation costs and everyday household expenses across India.

Nomura had flagged earlier that a 5 per cent hike in petrol and diesel prices could add 25–30 basis points to India’s headline inflation a signal that the cost of the Iran war is now landing firmly on Indian consumers’ plates.