Fourth hike this month pushes up CNG rates by ₹6 so far

Compressed natural gas prices were hiked by ₹2 per kilogram on Tuesday, marking the fourth increase in the last two weeks. Indraprastha Gas Limited revised the rates across Delhi-NCR, pushing CNG in the national capital to ₹83.09 per kg.

The latest revision comes a day after oil companies raised petrol and diesel prices for the fourth time this month. Petrol now costs ₹102.12 per litre in Delhi, while diesel is at ₹95.20.

For commuters in Noida, Ghaziabad and Greater Noida, CNG will now cost ₹91.70 per kg. Gurugram residents will pay ₹88.12 per kg.

Why prices are rising

The sustained price revision is being driven by volatility in global crude oil markets. Sources indicate crude prices have climbed from around $70 per barrel before the Iran-US conflict to over $100 per barrel now.

State-owned oil marketing companies have been absorbing significant losses in recent weeks. According to Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas, companies were losing approximately ₹1,000 crore daily on selling petrol, diesel and domestic cooking gas before the price revision cycle began on May 15.

That figure has since reduced to about ₹600 crore per day following the staggered hikes, officials said.

Ripple effect on household budgets

The cascading impact of rising fuel prices is already visible across sectors. Transporters are expected to revise freight charges, which will directly affect prices of vegetables, fruits and other essentials coming from other states.

Farming communities are also feeling the pressure. Higher diesel prices mean increased operational costs for tractors and irrigation pumps, potentially pushing up grain prices in the coming months.

Commuters may need to prepare for higher bus and auto-rickshaw fares as operators pass on the increased CNG cost. School bus services in Delhi-NCR are also likely to revise their monthly fees.

CNG vehicle sales defying price trend

Interestingly, the repeated price hikes have not dampened demand for CNG-powered vehicles. Dealers in Bhopal report a 50 per cent increase in CNG vehicle sales over the last three years, with showrooms selling 10 to 15 such units daily.

Industry observers attribute this to the fuel's still-lower cost compared to petrol and diesel, along with better mileage. Whether this trend holds if prices continue rising remains to be seen.

Officials have indicated that further revisions cannot be ruled out if crude oil remains elevated for a prolonged period.

Fuel Prices Hiked Third Time in 10 Days Across India

State-owned oil marketing companies announced another round of fuel price increases on Saturday, marking the third revision in less than ten days. Petrol prices rose by 87 paise per litre and diesel by 91 paise per litre in the national capital.

Following the revision, petrol now costs ₹99.51 per litre in Delhi, up from ₹98.64. Diesel is priced at ₹92.49 per litre, compared to ₹91.58 earlier. Compressed Natural Gas (CNG) prices were also increased by ₹1 per kg, taking the rate to ₹81.09 per kg in Delhi.

Sharpest Impact in Rajasthan

In Jaipur, the hike was marginally higher. Petrol became costlier by 93 paise, reaching ₹109.84 per litre, while diesel increased by 92 paise to ₹95.06 per litre. This marks the third consecutive fuel price adjustment in Rajasthan within nine days.

The latest increases come as international crude oil prices continue to remain elevated due to the ongoing conflict in West Asia. Sources in the petroleum sector said oil companies have begun passing on the higher costs in a calibrated manner after absorbing losses for several weeks.

Timeline of Recent Increases

Since May 15, fuel rates have climbed steadily. The first hike of ₹3 per litre was followed by a 90 paise increase on May 19. With Saturday’s revision, the cumulative rise in petrol and diesel prices has touched nearly ₹5 per litre in just over a week.

Industry observers noted that before the West Asia tensions escalated, crude oil was hovering around $70 per barrel. Prices have since crossed $100 per barrel, putting significant pressure on Indian oil companies.

Losses Prompted Action

According to government officials, public sector oil companies including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum were incurring monthly losses of around ₹30,000 crore on petrol, diesel, and LPG sales. The companies had been absorbing the impact for some time before initiating daily price revisions.

The Centre had earlier reduced special excise duty on petrol and diesel by ₹10 per litre each to cushion consumers. Despite this relief, rising global prices have made further adjustments necessary.

Ripple Effect on Everyday Costs

The repeated fuel price hikes are expected to have a cascading impact on multiple sectors. Transportation and freight costs are likely to rise, which could make vegetables, fruits, and other essential commodities more expensive, especially those transported from distant states.

Farmers may also face higher input costs as running tractors, pump sets, and other diesel-powered equipment becomes costlier. Public transport operators have indicated that bus and auto fares, including school bus charges, could see upward revisions in the coming days.

How Fuel Prices Are Determined

Fuel pricing in India follows a dynamic daily revision system, with rates updated at 6 AM every day. The final consumer price includes several components: international crude oil cost, refining expenses, central excise duty, dealer commission, and state-level Value Added Tax (VAT).

Since states levy different VAT rates, fuel prices vary significantly across cities. Delhi generally has lower rates compared to many other states due to lower local taxes.

Outlook Remains Uncertain

Petroleum Ministry officials have maintained that prices are being adjusted gradually to avoid sudden shocks to consumers. However, if crude oil prices remain above $100 per barrel for an extended period, further increases cannot be ruled out.

Consumers in major cities are already feeling the pinch, with many expressing concern over the timing of these hikes amid rising living costs. Market experts suggest that any de-escalation in West Asia tensions could help stabilise global crude prices and bring some relief at the pump.