Fuel Price Hike Overview in Major Cities
The government raised petrol, diesel, and CNG prices following a surge in global crude oil prices triggered by the Iran war. This is the first retail fuel price hike in four years. The increase is expected to affect transportation costs, household spending, and overall inflation.
| City | Petrol Price (Rs/Litre) | Petrol Hike (Rs) | Diesel Price (Rs/Litre) | Diesel Hike (Rs) | CNG Price (Rs/Kg) | CNG Hike (Rs) |
|---|---|---|---|---|---|---|
| Delhi | 97.77 | 3.00 | 90.67 | 3.00 | 79.09 | 2.00 |
| Kolkata | 108.74 | 3.29 | 95.13 | 3.11 | — | — |
| Mumbai | 106.68 | 3.14 | 93.14 | 3.11 | 84.00 | 2.00 |
| Chennai | 103.67 | 2.83 | 95.25 | 2.86 | — | — |
| Hyderabad | 104.50 | 3.10 | 94.20 | 3.05 | 80.50 | 2.00 |
Economic Implications and Expert Insights
India’s state-run oil companies, IOCL, BPCL, and HPCL, were absorbing high crude costs for months, incurring daily losses of around Rs 1,600 crore. Imported crude prices jumped from $69 per barrel in February to $113-114 per barrel after the Iran war began on February 28. Economists, including Finance Commission Chair Dr Arvind Panagariya, recommended that retail prices be adjusted to prevent further losses and sustain OMC operations.
Prime Minister Modi has appealed to citizens to conserve fuel and encouraged work-from-home practices to reduce foreign outflows. The Delhi government initiated a 90-day campaign promoting fuel-saving habits and limited office days.
The fuel price increase is expected to push up transportation and logistics costs, which may drive inflation in essential commodities like milk and vegetables. Household savings could shrink, and discretionary spending may reduce, potentially slowing consumption, production, and GDP growth. While consumers will feel the immediate impact, this step was unavoidable given the international crude price surge.
