Petrol and diesel prices could rise by ₹4 to ₹5; cooking gas may also become more expensive

New Delhi: Due to the continuous rise in crude oil prices, the government is considering hiking the rates of petrol, diesel, and LPG cooking gas cylinders. Media reports quoted oficials as saying that petrol and diesel prices may need to be raised by ₹4–5 per liter. Meanwhile, the price of domestic LPG could increase by ₹40–50 per cylinder. This news comes at a time when the price of commercial LPG has already been hiked by ₹993, effective today - May 1. Now, a hike in cooking gas prices is also being contemplated.

The government aims to alleviate the burden on oil companies by raising the prices of LPG, as well as petrol and diesel, given that crude oil prices have surged above $120 per barrel amidst tensions between Iran and the United States. Following a significant hike in the prices of commercial LPG gas cylinders, the general public is now gripped by apprehension regarding petrol and diesel prices. The fear is that the government may soon implement a substantial increase in the prices of petrol and diesel. In fact, due to a sharp surge in global crude oil prices and the fact that retail fuel prices have remained static for four years, the losses incurred by oil companies are mounting. It is widely believed that petrol and diesel prices may be raised to offset these mounting losses.

Is This a Potential Shock?

According to a reports, government officials have not ruled out the possibility of a hike in petrol and diesel prices in the near future. Official sources stated on Friday that, given the changed circumstances, the likelihood of an increase in petrol and diesel prices cannot be entirely dismissed. It is worth noting that crude oil prices in the international market surged this week, reaching a four-year high of $126 per barrel. Although there has been a slight decline since then, prices continue to hover above the $110 per barrel mark. The situation remains volatile due to the impact on the movement of oil tankers through the Strait of Hormuz and the ongoing tensions between Iran and the United States.

It should be noted that the international oil market has been in a state of turmoil following an attack on Iran by the US and Israel on February 28, and Iran's subsequent retaliatory actions. As a result of these developments, supplies have been disrupted through the Strait of Hormuz—a vital waterway that handles approximately one-fifth of the global oil trade.

Last week, a senior official from the Ministry of Petroleum stated that, due to retail prices remaining unchanged for nearly four years, state-run oil companies are currently incurring a loss of approximately ₹20 per liter on petrol and ₹100 per liter on diesel. However, at that time, no specific plans to raise prices were announced. Last year, the average price of crude oil stood at around $70 per barrel, whereas this month, prices have been trading above the $114 per barrel mark.

Has Indian Oil Issued a Denial?

Earlier, Indian Oil Corporation (IOC)—in a statement issued on behalf of the petroleum industry—stated that despite the rise in international energy prices, the rates for petrol, diesel, and domestic cooking gas (LPG) are not being increased. However, public sector oil companies have raised the prices of commercial LPG, industrial diesel, 5-kg LPG cylinders, and aviation fuel sold to international airlines in line with their costs.

Were There Apprehensions of Post-Election Price Hikes?

Analysts had previously expressed apprehensions that following the conclusion of voting for the West Bengal Assembly elections on April 29, petrol and diesel prices could witness an increase ranging from ₹25 to ₹28 per liter. Currently, the price of petrol in Delhi stands at ₹94.77 per liter, while diesel is priced at ₹87.67 per liter.