Last updated:
India is the only major economy in the world to cut retail fuel prices through the Russia-Ukraine window and kept retail prices unchanged for 78 days before the Hormuz disruption.
An employee updates the revised prices of petrol and diesel at a petrol pump in Nadia, West Bengal on Monday. (PTI)
Petrol and diesel prices were increased by Rs 2.61-2.71 per liter on Monday in the fourth increase in less than two weeks. With the latest revision, the cumulative increase in petrol and diesel prices has reached nearly Rs 7.5 per liter since fuel price revision resumed on May 15 after a prolonged pause, raising concerns over inflationary pressures in the economy and higher transportation costs.
The phased revision of more than Rs 7 in four OMC moves after 78 days of full absorption still makes India’s hike among the lowest in the world, experts say.
Price rise: local ground reality
latest revision According to industry sources, petrol prices increased by Rs 2.61 per liter and diesel prices increased by Rs 2.71 per liter. Petrol prices in Delhi rose to Rs 102.12 per liter from Rs 99.51 earlier, while diesel rates rose to Rs 95.20 per liter from Rs 92.49.
Retail fuel prices have seen back-to-back increases after remaining stable for a long time and the cost of imports has increased sharply due to higher crude oil prices in the global market, narrowing refining margins and a weak rupee.
The prices of petrol and diesel were increased by Rs 3 each per liter on May 15 and by 90 paise per liter on May 19. After this, on May 23, the price of petrol increased by 87 paise per liter and the price of diesel increased by 91 paise per liter.
After Monday’s hike, petrol now costs Rs 111.21 per liter and diesel Rs 97.83 per liter at PSU pumps in Mumbai, while in Kolkata the prices stood at Rs 113.51 and Rs 99.82, respectively. Petrol in Chennai is Rs 107.77 and diesel is Rs 99.55 per liter. Prices vary across states due to local taxes.
State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) together control 90 percent of India’s fuel market.
back-to-back increases Global crude oil prices have surged more than 50 percent since late February following US-Israeli attacks on Iran and disruption of shipments through the Strait of Hormuz, a vital global oil transit route. Fuel retailers kept pump prices low despite rising input costs in the first two and a half months of the conflict, with the government saying the move was aimed at protecting consumers from inflation. However, opposition parties accused the government of delaying the price revision till key state elections.
global perspective
During the 78 days from the closure of the Strait of Hormuz on 28 February 2026 to the OMC amendments of 15, 19, 23 and 25 May, India kept petrol and diesel prices essentially unchanged, while the rest of the world increased prices by 10, 20, 50 and in some cases 90 per cent.
cumulative indian review The May four moves, by just over ₹7 per litre, take the headline movement over the Indian retail price to almost seven and a half per cent.
Most countries have significantly increased fuel prices, ranging from 22% to 100%, and retail prices often exceed ₹150 per litre, especially in Europe and neighboring countries. India’s prices remain among the lowest among non-subsidized economies, about half European levels, and below many developing countries despite recent growth.
Number Story: Overview
A country-by-country look Percentage change in local-currency pump price between 23 February 2026 and May 2026, in Indian Rupees equivalent to mid to end May 2026 full pump price after Hormuz.
The paradox works on two dimensions: India had low percentage growth, and it sits at one of the lowest absolute price levels among non-subsidized economies. The global weighted average is shown in gray for reference.
decoding numbers
1. Every major developed economy now sells petrol above ₹150 per liter and a maximum of ₹180 per litre; The EU 27 weighted average for petrol stands at ₹179 and diesel at ₹184.
2. India’s two big neighbors – Pakistan and Nepal – have gone much further than ₹135 per liter on petrol despite lower nominal incomes; In Sri Lanka, Myanmar and the Philippines, prices have crossed ₹130.
3. The only economies that consistently retail petrol below the Indian border are those giving direct subsidies (UAE and Malaysia) or the US, which has structurally low fuel taxation. So India keeps petrol and diesel prices at or below most developing countries and about half the European pump prices, while still raising prices lower than any non-subsidized counterpart during the current disruption.
The data shows the Indian revision of just over seven rupees per litre, equivalent to about seven and a half per cent on a Delhi basis, is the smallest material uplift of any major economy outside the directly subsidized Gulf producers – smaller than Japan, smaller than every European economy, smaller even than South Asian peers, who lack India’s buffers.
India is the only major economy to cut retail fuel prices through 2 energy crises
Between the Russia-Ukraine war starting in February 2022 and the Hormuz conflict starting in February 2026, the international price of crude oil has gone through two of the sharpest fluctuations since the 1970s. Brent has crossed one hundred and twenty dollars a barrel twice in that window. Every major importing economy in the world has passed the cost on to its consumers, in some cases many times more. India has done the opposite. In these four years, the Indian government has cut the retail prices of petrol and diesel four times, the last of which was on the eve of the Hormuz conflict.
Through the Russia-Ukraine window, India was the only G20 economy to reduce the retail price of petrol and diesel. The cuts of November 2021 and May 2022 together reduced the price of petrol by eighteen rupees and diesel by sixteen rupees in six months. Through the Strait of Hormuz, the SAID cut of March 27, 2026 reduced petrol excise duty to Rs 3 per liter and diesel excise duty to zero. No more crude oil was supplied to the consumer; It was absorbed by the treasury.
damages and compensation
During the Hormuz disruption the price of Brent was around one hundred and twenty-six dollars per barrel, the Indian government was spending around twenty-four rupees per liter on petrol and thirty rupees per liter on diesel. PIB data for March 27, 2026 reported under-recovery of twenty-six rupees per liter on petrol and eighty-one ninety paise per liter on diesel at the refinery gate. The SAED cut of March 27 transferred Rs 10 of petrol difference and Rs 10 of diesel difference from the consumer to the government treasury. The four phased OMC revisions of May 15, 19, 23 and 25 together brought down the retail price by about ₹7.35 on petrol and ₹7.53 on diesel, significantly reducing the daily under-recovery of OMCs from ₹1,000 crore per day at the peak of the disruption. The remaining losses are still being borne.
To maintain Indian produced fuel in the Indian market and prevent domestic supplies from getting squeezed out of international price arbitrage, export duty of twenty-one rupees fifty paise per liter on diesel and twenty-nine rupees fifty paise per liter on ATF was imposed with a cut date of March 27, 2026. The export levy contributed to SAE reduction as a net protection to the Indian consumer rather than providing revenue to refiners.
Retail prices of petrol and diesel in Delhi had increased by less than one per cent in both directions over the four years from February 2022 to February 2026 against the Brent benchmark, which has risen sharply in both directions over the same period. The four OMC revisions on May 15, 19, 23 and 25, 2026, cumulatively increased the retail price by ₹7.35 on petrol and ₹7.53 on diesel, the first time in almost four years.
Review
In four years, which included the Russia-Ukraine war and the closure of the Strait of Hormuz, the Indian government cut central excise duty on petrol and diesel four times, absorbing nearly ₹30,000 crore of revenue to the exchequer in the most recent cut alone, and redeemed over ₹1.30 lakh crore of UPA-era oil bonds with the principal amount alone.
India is the only major economy in the world to cut retail fuel prices through the Russia-Ukraine window. India is the only major economy in the world to keep retail fuel prices essentially unchanged during the first 78 days of the Hormuz disruption.
The cumulative OMC revision of just over ₹7 per liter over 15, 19, 23 and 25 May 2026 is the smallest physical upward revision of any major economy outside directly subsidized Gulf producers, one of the lowest absolute pump prices in the non-subsidized world.
The states that impose the highest taxes on fuel are those ruled by the political opposition – Congress, India Bloc, AAP and the TVK-Congress alliance in Tamil Nadu. The creation of consumer protection framework, relief from past liabilities and compensation for current losses is the job of the present government.
read more
