Petrol, Diesel Prices Up 90 Paise; Second Hike in a Week

NEW DELHI, May 19: Petrol and diesel prices were increased by about 90 paise per litre on Tuesday, the second hike within a week, taking rates to their highest levels since May 2022 after state-run oil firms resumed revisions following a nearly four-year freeze.

In New Delhi, petrol rose to Rs 98.64 per litre from Rs 97.77, while diesel climbed to Rs 91.58 from Rs 90.67, according to industry sources.

This follows a Rs 3 per litre hike on Friday—the first increase in over four years—triggered by surging global crude prices amid the Iran conflict, which disrupted supplies through the Strait of Hormuz. Since February 28, crude prices have jumped over 50 per cent, forcing retailers to pass on part of their accumulated losses.

Despite the recent hikes, industry sources said the increase remains modest compared to the rise in crude prices, with oil companies still incurring losses estimated at Rs 10 per litre on petrol and Rs 13 on diesel after the May 15 revision.

Officials said the earlier hike reduced losses by about a fourth, but oil firms continue to incur daily losses of around Rs 750 crore. Rates had remained largely frozen since April 2022, barring a Rs 2 per litre cut in March 2024 ahead of Lok Sabha elections.

Fuel prices vary across states due to differences in VAT. In Mumbai, petrol now costs Rs 107.59 per litre and diesel Rs 94.08, while Kolkata rates stand at Rs 109.70 and Rs 96.07, respectively. In Chennai, petrol is priced at Rs 104.49 and diesel at Rs 96.11.

The recent increases come after elections in key states, with opposition parties alleging political timing behind the earlier price freeze. The Friday hike followed the ruling BJP’s electoral gains in three of five states.

Alongside petrol and diesel, compressed natural gas (CNG) prices have also risen, with a Rs 2 per kg increase on May 15 and a further Re 1 hike on Sunday in cities like Delhi and Mumbai.

Meanwhile, domestic LPG prices were raised by Rs 60 per cylinder in March, though oil companies still face losses of Rs 674 per 14.2-kg cylinder.

Private retailers had already increased prices earlier. Nayara Energy raised petrol by Rs 5 per litre and diesel by Rs 3 in March, while Shell increased petrol by Rs 7.41 and diesel by Rs 25 per litre from April 1.

The government has urged fuel conservation measures, including reduced travel and work-from-home practices, to manage rising import costs and pressure on foreign exchange reserves. Some states have also issued advisories to limit official travel and physical meetings.

Economists warn the fuel price hikes may add to inflationary pressures. Retail inflation (CPI) rose to 3.48 per cent in April from 3.40 per cent in March, while wholesale inflation surged to 8.3 per cent, a 42-month high, driven largely by rising fuel and energy costs. (Agencies)