May 15, World (LNW): India has announced its first increase in petrol and diesel prices in four years as soaring global crude oil costs continue to place pressure on the country’s economy and energy sector.
Fuel retailers confirmed on Friday that both petrol and diesel prices had been raised by 3 rupees per litre across major cities, marking an increase of just over three per cent. In the capital, New Delhi, petrol prices climbed to 97.77 rupees per litre, while diesel rose to 90.67 rupees.
The move comes after international oil markets experienced sharp volatility following escalating tensions in the Middle East. Crude prices surged beyond 120 US dollars per barrel after disruptions linked to the conflict involving Iran, Israel and the United States affected shipping activity through the strategically vital Strait of Hormuz. Although prices later eased slightly, oil has continued trading well above recent averages.
Economic analysts say India had delayed revising domestic fuel prices despite mounting losses among state-owned fuel retailers, many of which have absorbed the burden of rising import costs for months.
Experts noted that while the direct impact on inflation may remain relatively modest initially, the wider economic consequences could be more significant, particularly through increased transport, logistics and food distribution costs.
The country’s three major state-controlled fuel suppliers — Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum — dominate the retail fuel market and typically adjust prices simultaneously.
Earlier this week, Prime Minister Narendra Modi urged both businesses and citizens to adopt fuel-saving measures as global energy prices continue to strain the country’s foreign exchange reserves. Suggested measures reportedly included reduced non-essential travel, energy conservation efforts and increased remote working arrangements.
Opposition parties and market observers have accused authorities of postponing fuel price increases until after the conclusion of several key state elections held this month, during which Modi’s Bharatiya Janata Party expanded its political influence in parts of the country.
Government officials previously acknowledged that fuel retailers had been operating at substantial losses, especially on diesel sales, due to the gap between domestic pump prices and international crude costs.
Meanwhile, private sector refiners had already begun raising prices earlier this year in an attempt to offset growing financial pressure caused by higher global oil prices and import expenses.
Analysts warn that if geopolitical instability in the Middle East continues, further fuel price revisions could become unavoidable in the coming months.