State-run oil marketing companies are absorbing steep losses of up to ₹100 per litre on diesel and around ₹20 per litre on petrol, even as global crude oil prices surge, with the government on Thursday firmly ruling out any immediate increase in retail fuel prices.
The ministry of petroleum and natural gas (MoPNG) dismissed speculation of a ₹25–28 per litre hike post assembly elections, stating that “there is no such proposal under consideration by the government”, and termed such reports as “mischievous and misleading”.
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The pressure on fuel economics has intensified amid a sharp rally in global crude prices, which have climbed from around $70 per barrel last year to over $113 this month, with peaks touching $119 per barrel following escalating tensions in West Asia. Despite a more than 50% increase in input costs, domestic fuel prices have remained unchanged.
Disparity in Dollars
India’s high import dependence — around 88% of crude oil needs has amplified the impact of global volatility. “There is a huge increase… inspite of that the government has not increased prices and the effort of the government has been to keep the prices stable,” said Sujata Sharma, joint secretary, MoPNG.
The surge in crude prices has translated into significant under-recoveries for oil PSUs. “(Under-recovery) may be around ₹20 (per litre) on petrol and around ₹100 (a litre) on diesel,” Sharma said, indicating the scale of financial strain on state-run refiners. These losses fluctuate daily with global price movements.
Retail fuel prices have been frozen since April 2022, with petrol currently priced at ₹94.77 per litre in Delhi and diesel at ₹87.67 per litre. During this period, oil companies have offset losses in high-price cycles with gains when crude softened, helping maintain price stability at the pump.
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To cushion consumers, the government has stepped in with fiscal measures, including a ₹10 per litre excise duty cut on both petrol and diesel last month to ensure that “the burden of high oil prices are not transferred to consumers”. It has also imposed a levy on fuel exports to nudge refiners to prioritise domestic supplies.
The ministry underscored that India has diverged from global trends. “In fact, India is the only country where petrol and diesel prices haven’t increased in the last four years,” it said, adding that the government and oil PSUs have taken “relentless steps” to shield consumers from international price shocks.
On LPG, Sharma pointed out that while the Saudi Contract Price has risen 102% between July 2023 and April 2026, domestic cooking gas prices have declined by 17%. “Data is speaking for itself and the effort of the government is also visible,” she said.
Geopolitical Risks
The situation has been further complicated by geopolitical tensions in West Asia, particularly around the Strait of Hormuz, which handles nearly one-fifth of global oil trade, raising concerns over supply disruptions.
Adding to the uncertainty, two of the three container ships that came under Iranian fire near the Strait of Hormuz on Wednesday had Indian seafarers on board, all of whom are safe. Shipping Ministry Additional Secretary Mukesh Mangal said, “none of the Indian seafarers have been injured… all of them are safe.” One vessel, Euphoria, had 21 Indian crew members, while another ship, Epaminondas, had one Indian seafarer.
With crude prices elevated and geopolitical risks persisting, the government signalled that shielding consumers will remain the priority, even as oil PSUs continue to absorb mounting losses.
TOPICSPetrol PriceThis article was first uploaded on April twenty-three, twenty twenty-six, at thirteen minutes past ten in the night.