India’s state-run fuel retailers on Friday raised petrol and diesel prices by Rs 3 per litre — a hike of just over 3% — marking the first increase in petrol prices in four years. After the change, diesel retails at Rs 90.67 per litre and petrol at Rs 97.77 per litre, though final pump prices vary across states and cities because of differing local taxes, transport costs and dealer commissions.
The three companies that implemented the rise were Indian Oil Corporation, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). BPCL confirmed the price adjustment; HPCL and Indian Oil had not immediately replied to requests for comment.
The move comes as global crude prices surged earlier this year, briefly topping $120 a barrel amid tensions in the Middle East related to the US-Israel conflict with Iran, before easing toward roughly $100–$105. The Indian oil ministry has said those higher international rates forced retailers into large losses: an official, Sujata Sharma, estimated retailers were losing about Rs 100 per litre on diesel and around Rs 20 per litre on petrol earlier in the year.
Government leaders have framed the increase against a backdrop of broader economic caution. Prime Minister Narendra Modi is on a state visit to the United Arab Emirates, where leaders signed agreements that include strategic defence cooperation, arrangements on petroleum reserves and LPG supply commitments. Domestically, Modi has appealed to citizens to curb fuel use and adopt other conservation measures, urging people to work from home when possible, postpone foreign travel, avoid unnecessary imports and delay non-essential gold purchases as part of what he described as a patriotic contribution during global instability.
Those appeals have been followed by concrete steps in some places. In the national capital, the chief minister announced a set of 90-day measures for government offices: two work-from-home days per week, a “No Vehicle Day,” and directions for ministers to use public transport. Several state administrations have also asked departments to limit travel, avoid in-person events and hold meetings online.
Analysts warn the price rise will feed into inflation, albeit modestly at first. Madhavi Arora, chief economist at Emkay Global Financial Services, estimated the direct effect of the Rs 3 hike will add roughly 15 basis points to consumer price inflation, with broader indirect effects likely to be larger. India’s retail inflation was 3.48% in April, driven mainly by rising food costs, and remains exposed to risks from higher energy prices linked to the Middle East situation.
Prashant Vashisth, vice president and co-head of corporate ratings at ICRA (Moody’s Indian arm), said the increase — while modest — will slow petrol demand growth. He added that the government’s conservation measures such as encouragement of remote work would also weigh on fuel consumption.
The price move has drawn sharp criticism from opposition leaders who accuse the government of postponing necessary increases until after the 2026 state assembly elections. Mallikarjun Kharge, president of the Indian National Congress, said the government acted as if “everything is normal” during election campaigning and only now is urging conservation measures as the crisis deepens.
India is also wrestling with a tighter foreign-exchange position, with a limited supply of US dollars used to pay for imports; oil and gold remain the country’s largest import items. The new fuel prices and ongoing international volatility mean policymakers and markets will be watching closely for further adjustments, and economists have warned that this Rs 3 rise could be the first of several staggered increases if crude prices stay elevated.