The timing of the hike has been under scrutiny. Assembly elections concluded in the last week of April, and company executives had indicated a modest price increase would follow once polls ended. (ANI)
In Delhi, retail outlets of public sector oil companies are now selling petrol at ₹97.77 per litre and diesel at ₹90.67. IGL is selling CNG at ₹79.09 per kg in Delhi, ₹80.70 in Noida, ₹84.12 in Gurugram, and ₹88.44 in Ajmer. Because of local levies, pump prices vary by city: petrol is ₹108.74 in Kolkata, ₹106.68 in Mumbai, and ₹103.67 in Chennai; diesel is ₹95.13 in Kolkata, ₹93.14 in Mumbai, and ₹95.25 in Chennai.
The hike provides only partial relief. Government officials and company executives said oil marketing companies (OMCs) will still lose an estimated ₹10–12 per litre on petrol and ₹38–40 per litre on diesel, as international crude prices remain elevated. Benchmark Brent crude, which was at $72.87 a barrel on February 28 — the day the West Asia conflict broke out — surged 62% to $118.03 by April 29. It has since slightly receded and was trading at $108.55 per barrel on Friday although the figure was still 2.37% higher than $105.72 on Thursday – a change that underscores the volatility in energy prices.
At the same time, the Indian rupee has weakened to successive record lows, touching ₹95.74 per dollar on Friday — down more than 6% since the start of the year — as elevated crude import costs drive sustained dollar demand.
Friday’s retail rate increase was the first since April 2022, when prices were raised in the aftermath of Russia’s war in Ukraine. Between end of March and April 6, pump prices rose by roughly ₹9 per litre, often through daily increments of 80 paise.
The government had made an earlier intervention on March 27, cutting excise duty on petrol and diesel by ₹10 per litre each — a move that cost the exchequer ₹14,000 crore a month, or ₹1.68 lakh crore annualised.
That relief proved inadequate as the conflict prolonged and the Strait of Hormuz blockade continued to disrupt global energy supply chains. At an inter-ministerial briefing on May 8, the petroleum ministry’s joint secretary, Sujata Sharma, said the combined monthly under-recovery for petrol, diesel, and cooking gas had reached ₹30,000 crore.
The timing of the hike has been under scrutiny. Assembly elections concluded in the last week of April, and company executives had indicated a modest price increase would follow once polls ended.
Petroleum minister Hardeep Singh Puri said on Tuesday that OMCs were together losing ₹1,000 crore a day, and that a single quarter of losses at prevailing crude price levels would potentially erase their entire net profit for 2025–26.
On Sunday, Prime Minister Narendra Modi urged a spate of measures including fuel conservation, work-from-home practices, and limits on travel and imports, as surging global energy prices put pressure on the country’s foreign exchange reserves.
Some states have issued notices to government departments this week to restrict travel, avoid physical events and shift meetings online, while also asking them to work from home two days a week, with offices half-staffed.
Windfall tax imposed on petrol exports; diesel, ATF levies cut
Separately, the government on Friday also imposed a windfall gains tax of ₹3 per litre on petrol exports — for the first time since the West Asia crisis began — while cutting the export levy on diesel to ₹16.5 per litre from ₹23, and on aviation turbine fuel to ₹16 per litre from ₹33, effective Saturday.
The export duties, first imposed on March 26, have been revised multiple times as the government sought to balance domestic fuel availability against refiner margins. The diesel export duty alone has swung sharply — from ₹21.50 at introduction, hiked to ₹55.50 in the April 11 review, before being progressively eased.
According to PTI, the finance ministry said the levies were aimed at disincentivising exports and ensuring domestic availability of petroleum products at a time when globally elevated crude prices make exports more profitable than supplying the home market.
Opposition hits out
Members of BJP’s rival parties hit out at the increase. Tamil Nadu chief minister C Joseph Vijay called the increase “not acceptable,” saying it would hit the poor, those using two-wheelers and small cars, and vehicle operators running loans. He also accused OMCs of not passing on the benefit when crude prices had fallen in the past, while pocketing profits.
Congress took aim directly at the PM. The party’s official handle on X called Modi an “inflation man” who had “unleashed the whip” on the public, adding that his “vasooli” had begun once elections ended. Leader of the Opposition Rahul Gandhi said the public would pay for the government’s mistakes, warning that “the ₹3 shock has already arrived, the rest of the “vasooli” will be done in instalments.”
DMK president and former Tamil Nadu CM MK Stalin said the hike, coming on top of a commercial cylinder price increase on May 1, had put the livelihoods of ordinary people in question. “How is the Union government going to protect the people from this?” he asked. Punjab finance minister Harpal Singh Cheema called the BJP “anti-farmer and anti-people,” pointing out that the diesel hike came a day after a paddy MSP increase of just ₹72 per quintal. “By giving a token MSP hike and raising diesel prices the very next day, the BJP government has effectively robbed farmers of their rightful compensation,” he said.
Samajwadi Party chief Akhilesh Yadav shared a cartoon of himself riding a bicycle — his party’s symbol — with a signboard reading “Use less petrol: PM.”
The BJP pushed back. Spokesperson Pradeep Bhandari accused Congress of seeking political opportunity in a global crisis. He noted that India’s 3.5% fuel price increase was lower than comparable hikes in many countries, and that prices had held stable for 76 days despite Brent crossing $100 per barrel.
