After days of speculation, the Centre has finally announced a Petrol, Diesel Price Hike, increasing retail fuel rates across the country. The revised prices came into effect from Friday, May 15, marking the first major increase in petrol and diesel prices for consumers in the last four years. Along with petrol and diesel, CNG prices have also been increased by Rs 2 per kg in key cities.
The latest Petrol, Diesel Price Hike has impacted all four metro cities, with Delhi, Mumbai, Kolkata, and Chennai witnessing noticeable increases in fuel rates.
Revised Petrol Prices In Metro Cities
- Delhi: Rs 97.77 per litre (+Rs 3.00)
- Kolkata: Rs 108.74 per litre (+Rs 3.29)
- Mumbai: Rs 106.68 per litre (+Rs 3.14)
- Chennai: Rs 103.67 per litre (+Rs 2.83)
- Revised Diesel Prices In Metro Cities
- Delhi: Rs 90.67 per litre (+Rs 3.00)
- Kolkata: Rs 95.13 per litre (+Rs 3.11)
- Mumbai: Rs 93.14 per litre (+Rs 3.11)
- Chennai: Rs 95.25 per litre (+Rs 2.86)
Apart from the Petrol, Diesel Price Hike, CNG prices have also gone up. In Delhi, CNG now costs Rs 79.09 per kg compared to the earlier Rs 77.09 per kg. In Mumbai Metropolitan Region (MMR), CNG prices have increased to Rs 84 per kg after a Rs 2 hike announced a day earlier.
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OMCs Facing Heavy Losses
Before this Petrol, Diesel Price Hike, oil marketing companies had already increased prices of premium petrol and diesel in March. Major state-run companies including Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited were reportedly facing losses of nearly Rs 1,600 crore per day.
The companies were purchasing crude oil at elevated global prices but were unable to fully pass on the burden to retail consumers. Reports suggest the government had delayed the hike earlier to keep inflation under control, as higher fuel prices directly impact transportation and the cost of essential commodities.
India’s oil companies were financially stable before the Iran war escalated on February 28. However, the conflict sharply pushed up global crude oil prices by more than 50 percent. India’s imported crude basket, which averaged around $69 per barrel in February, later surged to nearly $113-114 per barrel in subsequent months.
Several economists, including Arvind Panagariya, had stated that fuel prices should be revised to reflect global market realities.
PM Modi Appeals For Fuel Conservation
Earlier, Prime Minister Narendra Modi urged citizens to conserve fuel and adopt work-from-home practices wherever possible. According to him, reducing fuel consumption would help India save foreign exchange reserves amid rising global energy costs.
Supporting the Prime Minister’s appeal, Delhi Chief Minister Rekha Gupta announced a 90-day public awareness campaign encouraging people to adopt fuel-saving lifestyle changes. She also introduced two-day work-from-home arrangements for government offices.
Despite global uncertainty, the Centre has assured that there is no fuel shortage in the country. India currently maintains nearly 60 days of fuel reserves and around 45 days of LPG inventories.
Petrol, Diesel Price Hike Likely To Increase Inflation
Economists believe the Petrol, Diesel Price Hike will have a direct impact on inflation as transportation and logistics costs rise across sectors. Essential commodities, including milk, have already seen price increases in recent days.
Higher fuel prices reduce household savings and weaken discretionary spending, which may eventually affect economic growth. Experts say rising inflation tends to slow consumption, which in turn impacts production and GDP growth.
However, analysts also believe the latest Petrol, Diesel Price Hike was unavoidable due to the continued surge in global crude oil and gas prices triggered by the ongoing Iran conflict. As international energy costs climbed sharply, part of the financial burden had to be transferred to consumers.