Petrol Price Hike Likely, Diesel May Rise ₹35 After Polls

Petrol price hike concerns grow as oil firms face losses; diesel may surge ₹35 amid rising crude costs and post-election adjustments.

Fuel Price Outlook

New Delhi: A significant petrol price hike may be on the horizon, with rates expected to rise by up to ₹18 per litre, while diesel could see an increase of ₹35 per litre. According to recent estimates, oil marketing companies are under mounting financial pressure due to elevated global crude prices, even as domestic retail rates have remained largely unchanged.

The anticipated revision is likely to be implemented after the conclusion of assembly elections in five states, including West Bengal, as per industry sources.

Rising Crude Impact

Global crude oil prices have witnessed sharp volatility in recent weeks. Prices climbed from $73 per barrel on February 27 to $120 per barrel by March 19, before easing slightly to around $100 per barrel as of April 14.

This rapid escalation has widened the gap between international costs and domestic retail pricing, intensifying the burden on oil companies.

Mounting Company Losses

Oil marketing companies are currently incurring substantial losses due to the price mismatch. Estimates indicate a loss of approximately ₹18 per litre on petrol and ₹35 per litre on diesel.

At the peak of the crude price surge last month, daily losses for the three major public sector oil firms touched nearly ₹2,400 crore. Following a reduction in excise duty, these losses have moderated to around ₹1,600 crore per day.

Industry analysts note that for every $10 increase in crude oil prices, losses rise by nearly ₹6 per litre, adding further strain on company finances.

Election Timing Factor

Sources indicated that fuel price revisions are often deferred during sensitive political periods such as elections. With polling underway or recently concluded in key states, oil companies are expected to reassess pricing strategies once the electoral process ends.

This pattern has been observed in previous cycles, where fuel price adjustments were aligned with post-election timelines.

Import Dependency Concern

India remains heavily dependent on crude oil imports, with nearly 88% of its requirements sourced from abroad. Around 45% of these imports come from the Middle East, while Russia accounts for approximately 35%.

This high dependency exposes the domestic market to global price fluctuations, directly impacting fuel pricing and economic stability.

Fiscal Pressure Builds

Rising crude prices are also expected to widen India’s Current Account Deficit (CAD). Estimates suggest the deficit could increase by up to $20 billion in the first quarter of 2026.

At the same time, the government’s revenue from excise duty on petroleum products has seen a steady decline. From contributing 22% to total revenue in 2017, the share has dropped to around 8% currently.

Officials suggest that even a complete removal of excise duty would not fully offset the losses faced by oil companies under current market conditions.

Global Price Trends

The upward trend in fuel prices is not limited to India. In the United States, average petrol prices have crossed $4 per gallon for the first time since August 2022.

Neighbouring countries such as Pakistan, Nepal, and Sri Lanka have already implemented fuel price hikes in response to rising crude costs, reflecting a broader global trend.

What Lies Ahead

The coming weeks will be crucial for consumers and policymakers alike. If global crude prices remain elevated, a petrol price hike and diesel rate revision appear increasingly likely.

Such a move could have a cascading effect on transportation costs, inflation, and household budgets, making it a key India News Update and a closely watched Public Interest Story in the current economic climate.