Petrol and diesel prices increased by Rs 3 per litre across India amid the escalating West Asia crisis, while CNG prices rose by Rs 2 per kilogram as surging crude oil prices pushed state-run oil companies into massive financial stress.
Fuel prices across India witnessed a sharp increase on Friday after state-run oil marketing companies revised petrol and diesel rates by Rs 3 per litre each amid mounting financial pressure caused by the ongoing West Asia crisis and surging international crude oil prices.
The revised fuel prices came into immediate effect nationwide, adding further pressure on household budgets and transportation costs. In addition to petrol and diesel, compressed natural gas (CNG) prices were also increased by Rs 2 per kilogram. Following the revision, the retail price of CNG in Delhi reached Rs 79.09 per kilogram.
The latest hike comes as global crude oil prices continue to remain above the crucial $100 per barrel level due to fears of prolonged supply disruptions linked to escalating tensions involving Iran and the United States in the Middle East region. Industry analysts believe the continuing geopolitical instability has severely disrupted energy markets worldwide, creating heavy financial strain on fuel retailers in India.
Officials from the Union Petroleum Ministry said state-run oil marketing companies have been absorbing massive losses for months by keeping retail fuel prices relatively stable despite rising crude procurement costs. According to Sujata Sharma, Joint Secretary in the Petroleum Ministry, the combined under-recovery on petrol, diesel and LPG has now reached nearly Rs 30,000 crore every month.
Sharma stated that public sector oil companies are purchasing crude oil at significantly higher prices but are unable to fully pass the burden onto consumers due to concerns over inflation and economic stability. She added that the Central government had already reduced excise duties on petrol and diesel earlier, sacrificing nearly Rs 14,000 crore in monthly revenue in an attempt to ease pressure on consumers. However, despite those measures, the financial gap faced by fuel retailers continues to widen rapidly.
The worsening crisis has also raised concerns over the profitability of India’s major public sector oil companies, including Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited. Petroleum Minister Hardeep Singh Puri warned that if crude oil prices remain elevated for an extended period, the entire profit earned by these companies during FY26 could be wiped out.
Speaking during the CII Annual Business Summit 2026 earlier this week, the minister revealed that state-run oil retailers are currently losing nearly Rs 1,000 crore every day because of the sharp mismatch between crude procurement costs and retail selling prices. He estimated that combined quarterly losses could touch nearly Rs 1 lakh crore if prevailing market conditions continue.
Industry projections discussed during the summit indicated that Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum together could report losses of approximately Rs 1.2 lakh crore during the first quarter of FY27 alone.
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Economists have warned that the fuel price hike may trigger broader inflationary pressure across sectors such as transportation, agriculture and manufacturing. Higher fuel costs are expected to increase logistics expenses, potentially leading to price rises in essential commodities and consumer goods in the coming weeks.
With uncertainty continuing in global energy markets, further volatility in domestic fuel prices cannot be ruled out if geopolitical tensions in the Middle East intensify further.
