Fuel prices in India have risen for the third time this month, marking notable changes to petrol and diesel rates. Government sources have indicated that, despite the hikes, India has largely shielded consumers from the brunt of the global energy crisis. They underscored the fact that retail fuel prices remained unchanged for 76 days, despite significant increases in crude oil costs and global supply chain disturbances.

Government’s Position on Price Alterations

The latest hikes occurred in three separate phases on May 15, 19 and 23, culminating in an increase of approximately Rs 4.74 to Rs 4.82 per litre. The Centre asserted that these increases are modest compared to other nations facing steep surges in fuel prices due to ongoing geopolitical tensions. Allegedly, petrol and diesel prices in India rose by only around 5 per cent during this time, whereas figures for neighbouring Pakistan showed an increase of 54.9 per cent, the United States 44.5 per cent, and the United Kingdom 19.2 per cent.

Oil marketing companies (OMCs) are reportedly feeling the pressure, incurring losses close to Rs 1,000 crore daily due to elevated crude prices. Following the recent price adjustments, these losses have decreased to approximately Rs 750 crore per day. The government claimed that the current situation reflects a conscious effort to maintain consumer affordability while responding to external market conditions.

Variations in State Fuel Taxes and Government Response

The government drew a distinction between the tax regimes of BJP-ruled and Opposition-ruled states regarding fuel prices. Reportedly, petrol and diesel are at their highest in states like Telangana and Kerala, attributed to elevated Value Added Tax (VAT) rates. In contrast, prices are lower in states such as Gujarat, Uttar Pradesh, Delhi, Haryana, Goa, and Assam. Government officials emphasised that the excise duty applied by the Centre is consistent nationwide, suggesting that the discrepancies in fuel prices are chiefly due to state-specific VAT.

The Centre accused Congress and the INDIA bloc-ruled states of calling for reductions in central taxes while neglecting to lower VAT rates on their end. It was highlighted that the Centre had reduced excise duty by Rs 10 per litre in March 2026, with diesel duties reportedly decreased to zero, imposing a direct fiscal burden of nearly Rs 30,000 crore on the government.

In contrasting its current strategies to those of the previous UPA administration, government sources mentioned that between 2005 and 2010, the UPA government issued oil bonds totalling around Rs 1.34 lakh crore to offset oil company costs. In the current context, the government stated that it has already repaid over Rs 1.30 lakh crore of the principal amount.

Global Energy Market Influences on Fuel Prices

The government also referred to the ongoing Russia-Ukraine conflict and the current situation in the Strait of Hormuz, reinforcing its stance on managing retail fuel prices during widespread global disruptions. Officials positioned India as the “only major economy” that has either reduced or tightly controlled fuel prices throughout both energy crises. They alleged that Opposition-ruled states continue to impose elevated taxes on petroleum products.

As of the latest adjustments on Saturday, petrol prices increased by 87 paise per litre, while diesel saw a rise of up to 91 paise. This brings the total increase to nearly Rs 5 per litre in less than 10 days, following a sustained period of price stability despite the surging global crude oil prices, diminishing refining margins, and a depreciating rupee that affects import costs.

International crude prices have reportedly surged by more than 50 per cent since late February, attributed to military actions in the region and subsequent supply disruptions through the vital Strait of Hormuz, a key artery for global oil transport. Therefore, fuel retailers had earlier maintained stable prices despite rising input costs, a strategy the government claimed was designed to shield consumers from inflationary pressures.

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