Petrol, diesel prices may rise after 4-year freeze as oil firms face losses, govt sources say

The possibility of a hike in petrol and diesel prices remains open as state-run oil marketing companies continue to suffer mounting losses due to soaring global crude oil prices and a prolonged freeze in domestic fuel rates, sources told PTI.

The development comes as international crude prices touched a four-year high of $126 per barrel earlier this week before easing slightly, though prices continue to remain above $110 amid disruptions linked to the ongoing Iran–United States conflict (2026) and restricted ship movement through the Strait of Hormuz.

Four-year retail price freeze under strain

Retail prices of petrol and diesel in India have remained unchanged since April 2022 despite repeated fluctuations in global oil markets.

Last week, a senior oil ministry official said state-owned fuel retailers were incurring losses of around Rs 20 per litre on petrol and nearly Rs 100 per litre on diesel because pump prices had not been revised for almost four years even as crude oil prices surged globally.

According to sources, oil marketing companies are under growing financial pressure as the gap between international crude prices and domestic retail fuel prices widens sharply.

Commercial fuel prices already raised

While petrol, diesel and domestic LPG cylinder prices have remained unchanged, state-run firms have already started increasing rates for several other fuel categories.

Indian Oil Corporation, speaking on behalf of the industry earlier in the day, said petrol, diesel and domestic cooking gas prices had not been revised despite the steep rise in global energy costs.

However, oil companies have raised prices of commercial LPG cylinders, industrial diesel, 5-kg LPG cylinders and aviation turbine fuel supplied to international airlines in line with higher input costs.

Extent of crisis

Petrol and diesel prices could rise by Rs 25 to Rs 28 per litre after the conclusion of polling in the West Bengal Assembly elections on 29 April.

The government has so far avoided raising retail fuel prices despite increasing pressure from state-run retailers.

Oil prices have surged globally after tensions escalated between the United States and Iran, severely disrupting shipping movement through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints.

Nearly one-fifth of global crude oil supplies normally pass through the strait.

The conflict has triggered fears of prolonged supply disruptions, pushing energy prices to their highest levels since the immediate aftermath of Russian invasion of Ukraine.

Aviation and transport sectors under pressure

The fuel crisis has already begun affecting multiple sectors in India.

Leading Indian airlines recently warned the government that soaring aviation turbine fuel prices and longer rerouted international flights due to Gulf airspace disruptions were pushing the aviation industry towards severe financial stress.

Transporters and logistics operators have also raised concerns that any steep increase in diesel prices could trigger broader inflationary pressure across the economy.

Sources indicated that discussions were continuing within the government and oil sector over possible pricing measures, tax adjustments and subsidy options.

No official announcement regarding a fuel price hike has been made so far.