Fuel Price Freeze for 4 Years: Govt May Hike Petrol, Diesel as Crude Crosses $110

India may soon see an increase in petrol and diesel prices after nearly four years of unchanged retail rates, as global crude oil prices remain elevated and losses for state-run oil companies continue to mount. According to a report, government sources indicated that a price hike cannot be ruled out in the near term despite the ongoing freeze.

Retail fuel prices have remained unchanged since April 2022, even as international crude prices surged sharply. Crude oil recently touched a four-year high of USD 126 per barrel before easing slightly, but it continues to hover above USD 110. The spike follows geopolitical tensions after the February 28 attacks by the U.S. and Israel on Iran, and Tehran’s retaliation, which disrupted traffic through the strategically critical Strait of Hormuz—a route that handles nearly 20 per cent of global oil trade.

A senior oil ministry official recently stated that state-run fuel retailers are incurring significant under-recoveries due to the prolonged price freeze. Losses are estimated at around Rs 20 per litre on petrol and nearly Rs 100 per litre on diesel. This comes as crude prices have jumped from an average of about USD 70 per barrel last year to over USD 114 in recent weeks.

Despite the rising input costs, oil marketing companies have so far held retail prices steady. Indian Oil Corporation (IOC), speaking on behalf of the industry, reiterated that petrol, diesel, and domestic LPG prices have not been increased. However, companies have raised prices for commercial LPG, industrial diesel, 5-kg LPG cylinders, and jet fuel supplied to international airlines in line with market dynamics.

Market analysts had earlier suggested that fuel prices could rise by Rs 25–28 per litre following the conclusion of the West Bengal Assembly elections on April 29. While no official announcement has been made, the possibility remains open given the financial strain on oil retailers.

Meanwhile, the government has dismissed rumours circulating on social media about an immediate hike of Rs 10–12.50 per litre in fuel prices. The Press Information Bureau clarified that such claims are fake and no such order has been issued.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri highlighted that India has expanded its crude sourcing network from 27 to 41 countries to strengthen energy security. He also noted that measures such as excise duty cuts and export levies helped shield consumers when crude prices surged globally.

Currently, petrol prices stand at around Rs 94.77 per litre in Delhi, while diesel is priced at Rs 87.67 per litre. Despite stable retail pricing, the sustained rise in global crude oil rates continues to put pressure on domestic fuel economics, making a revision increasingly likely.

Disclaimer: The article is for informational purposes only and not investment advice.