The Centre has increased retail prices of petrol and diesel across India’s four major metro cities, marking the first hike in fuel prices for retail consumers in nearly four years. The revised rates came into effect from Friday, May 15, amid sustained pressure on global energy markets following the ongoing Iran conflict and rising crude oil prices.

In addition to petrol and diesel, compressed natural gas (CNG) prices have also been raised by Rs 2 per kilogram in key cities. In Delhi, CNG prices increased from Rs 77.09 per kg to Rs 79.09 per kg, while in the Mumbai Metropolitan Region the price was revised to Rs 84 per kg after a similar hike announced a day earlier. The fuel revisions are expected to impact transportation and logistics costs, potentially influencing broader inflation trends.

The latest decision comes weeks after international crude oil prices surged due to escalating geopolitical tensions in the Middle East and continued disruptions around the Strait of Hormuz, a critical global energy transit route. Rising import costs have significantly increased pressure on India’s state-run oil marketing companies, which were reportedly absorbing substantial losses while maintaining retail prices despite higher procurement expenses.

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According to reports, major public sector oil companies — Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited — were collectively incurring losses estimated at around Rs 1,600 crore daily due to the widening gap between international crude prices and domestic retail fuel rates. The companies had earlier raised prices of premium fuel variants in March but had not revised regular petrol and diesel rates until now.

Sources indicated that the government had delayed a broader price revision in an effort to contain inflationary pressure, as fuel prices directly affect transportation, manufacturing, and the cost of essential commodities. Economists have repeatedly warned that prolonged suppression of retail fuel prices could strain the financial health of oil marketing companies, particularly during periods of volatile global crude markets.

The fuel price hike is expected to trigger political debate and public concern, especially as households and businesses continue to face elevated living costs. Analysts said future price movements would largely depend on developments in the Middle East conflict, stability in global oil supply chains, and international crude price trends over the coming weeks.

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