On Monday, OMCs increased petrol prices by ₹2.61 per litre and diesel by ₹2.71 per litre. With this, cumulative hikes since May 15 have reached approximately ₹7.35 per litre for petrol and ₹7.53 per litre for diesel.
In Delhi, petrol prices have climbed to ₹102.12 per litre, while diesel now costs ₹95.20 per litre—marking the first time in four years that petrol has crossed the ₹100 threshold in the national capital.
Geopolitical tensions driving crude oil surge
The sustained rise in fuel prices is being driven primarily by instability in global oil markets following the escalation of conflict involving the US and Iran. The situation has severely disrupted oil shipping routes, particularly through the Strait of Hormuz, a critical chokepoint for global energy trade.
Strait of Hormuz carries nearly one-fifth of the world’s crude oil and liquefied natural gas shipments. Any disruption in this narrow passage has a direct impact on global supply chains, especially for import-dependent countries like India.
Brent crude prices surged sharply following the escalation, at one point jumping from around $72.87 per barrel to nearly $120. Although prices have since moderated, they remain volatile and elevated, keeping pressure on import costs.
India imports over 85% of its crude oil requirements, making domestic fuel prices highly sensitive to international fluctuations.
Oil companies under financial pressure
According to industry estimates, state-run fuel retailers had been incurring significant daily losses earlier in the crisis period due to a mismatch between retail pricing and global crude costs. These losses have narrowed after repeated price revisions but have not been fully eliminated.
The three major state-run companies—Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited—are still reportedly working to recover past “under-recoveries” accumulated when retail prices were kept steady during earlier phases of the price surge.
Analysts say that unless Brent crude stabilises well below $100 per barrel for a sustained period, further fuel price hikes cannot be ruled out.
Possibility of further hikes remains
Energy experts warn that the current round of fuel price revisions may not be the last. Some analysts believe a fifth hike could follow if global crude prices remain elevated or supply disruptions persist.
The uncertainty surrounding the Strait of Hormuz and ongoing geopolitical tensions continue to keep energy markets on edge, with even minor developments in diplomatic talks causing sharp price fluctuations.
Government signals and public impact
The Centre has acknowledged the challenges posed by global oil volatility. Petroleum Minister Hardeep Singh Puri recently indicated that difficult pricing decisions may be necessary if supply disruptions continue.
Prime Minister Narendra Modi has also urged citizens to adopt fuel-saving measures such as carpooling and increased use of public transport, signaling awareness of prolonged economic pressure from energy inflation.
Meanwhile, financial experts, including banker Uday Kotak, have warned that India may need to prepare for a more complex and uncertain energy environment in the coming months.
Diplomatic hopes, but uncertainty persists
Recent reports of backchannel discussions between the US and Iran have sparked hopes of de-escalation and potential reopening of critical shipping routes. Former US President Donald Trump has suggested that a broader framework agreement is close, though Iranian officials have offered more cautious statements.
However, security risks and naval tensions in the region continue to disrupt commercial traffic through the Strait of Hormuz. Even if a diplomatic breakthrough is achieved, experts caution that restoring normal oil shipping operations could take time.
Outlook
For now, India’s fuel pricing trajectory remains closely tied to global crude movements and geopolitical developments in West Asia. With uncertainty still surrounding supply routes and crude prices, consumers may face further volatility in the weeks ahead unless global conditions stabilise decisively.
