Fuel Prices Raised Again by 90 Paise/Litre Amid Higher Global Crude Costs

India on Tuesday raised petrol and diesel prices by around 90 paise/litre for the second time within a week, taking cumulative increases to nearly ₹4 per litre as state-run oil marketing companies continued passing on higher global crude oil costs to consumers amid volatility in international energy markets.

In Delhi, petrol prices rose by 87 paise to ₹98.64 per litre, while diesel prices increased by 91 paise to ₹91.58 per litre, as per data from Indian Oil Corporation. 

The latest revision follows Friday’s increase of ₹3 per litre each in petrol and diesel, the first broad-based retail fuel price hike in more than four years. The back-to-back hikes indicate that oil marketing companies will continue to reduce under-recoveries after absorbing a sharp rise in global crude prices and elevated freight and insurance costs linked to tensions in West Asia and disruptions around the Strait of Hormuz.

Global oil markets have remained volatile in recent weeks amid concerns over possible supply disruptions from the region. The rise in freight and insurance costs for crude shipments has also increased pressure on domestic fuel retailers.

The latest fuel revisions are also expected to have implications for the broader price environment over the coming months. Gaura Sen Gupta, Chief Economist at IDFC FIRST Bank Economics, had earlier estimated that Friday’s ₹3 per litre increase alone would add around 12 basis points to headline CPI inflation through direct pass-through effects.

Tuesday’s increase is expected to add further pressure through transportation, logistics, manufacturing inputs, and supply chains.