After commercial LPG, will petrol and diesel prices increase in near future? Here's what govt sources say

A rise in petrol and diesel prices cannot be ruled out in the near term, according to PTI citing government sources on Friday, as losses continue to grow due to a four-year cap on retail rates amid a steep rise in global crude oil prices.

International oil prices surged this week, briefly touching a four-year high of $126 per barrel before easing slightly, though they remained above $110. The sustained rise has been driven by restricted ship movements through the Strait of Hormuz and heightened tensions between the United States and Iran, with both sides exchanging sharp remarks amid stalled peace negotiations.

Indian Oil Corporation (IOC), speaking on behalf of the industry, mentioned that prices of petrol, diesel, and domestic LPG would remain unchanged despite rising global energy costs.

However, state-run oil companies have increased rates for commercial LPG, industrial diesel, 5-kg LPG cylinders, and jet fuel supplied to international airlines in line with higher input costs.

Analysts had previously warned that fuel prices could rise by ₹25–28 per litre following the conclusion of polling for the West Bengal Assembly elections on April 29.

"An order circulating on social media claims to be issued by the Ministry of Petroleum and Natural Gas, stating that petrol and diesel prices have been increased by ₹10 and ₹12.50, respectively,” PIB said on X., adding, "This order is #FAKE. The Government of India has NOT issued any such Order.”

Global oil prices jumped sharply after the US and Israel launched strikes on Iran on February 28, followed by Tehran’s extensive retaliation that effectively closed the Strait of Hormuz—one of the world’s most vital energy routes connecting the Persian Gulf to global markets and carrying about one-fifth of global oil trade, along with substantial volumes of liquefied natural gas.

A senior oil ministry official last week said during a press briefing that state-run fuel retailers were facing losses of around ₹20 per litre on petrol and nearly ₹100 per litre on diesel, as retail prices have remained unchanged for almost four years despite the rise in international oil rates. She, however, noted that there were currently no plans to revise fuel prices.

Crude oil, which was priced at around $70 per barrel last year, has averaged more than $114 per barrel this month.

Retail prices of petrol and diesel have remained unchanged since early April 2022, even as global oil rates have fluctuated during this period. When crude prices declined, state-run oil companies earned significant profits, which helped offset losses during periods of rising prices.

At present, petrol in Delhi is priced at ₹94.77 per litre, while diesel costs ₹87.67 per litre.

(With inputs from PTI)