Fuel prices may rise ₹4-5/litre; LPG +₹50 in 2026

What the government is considering

Top government sources indicated that retail petrol and diesel prices could be raised by around ₹4-5 per litre, while domestic LPG cylinders may see an increase of about ₹40-50. Officials said internal deliberations are under way and multiple options are being evaluated, including the timing and extent of any increase. A final decision has not been taken yet. But sources suggested a call on the proposed hike could be made within the next 5-7 days.

If approved, this would mark the first increase in petrol and diesel prices in nearly four years. Retail rates have largely remained unchanged since April 2022, even as global crude oil markets have turned volatile in recent months.

Why the timing is back in focus

Officials said the government is closely monitoring the evolving situation in West Asia, which has contributed to a sharp rise in global crude oil prices. International crude prices surged to a four-year high of $126 per barrel earlier this week before easing, but remained above $110 amid restricted ship movements through the Strait of Hormuz and ongoing tensions involving the United States and Iran. The decision on retail prices, sources said, will likely depend on how crude prices move in the coming days, along with the trajectory of geopolitical tensions in key oil-producing regions.

The government, according to a person aware of the discussions, is making efforts to ensure any impact on inflation is minimised. Officials have also flagged the political sensitivity of fuel and cooking gas pricing because of its direct link to household budgets and transport costs.

The price freeze since 2022 and where prices stand now

Retail petrol and diesel prices have remained unchanged since early April 2022. In Delhi, petrol is priced at ₹94.77 per litre and diesel at ₹87.67 per litre, as per the figures cited in the reports. This stability has held even as crude prices moved sharply higher.

One earlier government communication also noted that petrol and diesel are deregulated and determined by oil marketing companies (OMCs), while the government keeps a close watch on inflation and supply conditions.

Losses cited by the oil ministry and pressure on OMCs

A senior oil ministry official said at a news briefing last week that state-owned fuel retailers were incurring losses of about ₹20 per litre on petrol and roughly ₹100 per litre on diesel as pump prices remained frozen despite the rise in crude. The reports also noted that crude averaged about $10 per barrel last year, but has risen to over $114 this month.

IndiaToday.in had earlier reported that fuel prices could rise given the pressure on OMCs. Government sources said discussions are focused on balancing financial stress on oil companies with the need to prevent a significant push to inflation or a hit to consumer demand.

How a “calibrated” hike is being framed

Officials indicated that if a hike is approved, it may be structured in a calibrated manner to avoid a sharp spike in retail inflation. This is particularly relevant as food prices were described as sensitive and global uncertainties persist. Sources said the government is weighing fiscal stability and consumer protection as competing priorities.

At this stage, the reports do not indicate the exact date of any change, only that a decision could be taken within 5-7 days.

Recent moves in premium fuels, commercial LPG and ATF

While regular petrol and diesel prices have been stable, Indian Oil Corporation (IOCL) raised prices of its premium variants in Delhi. XP100 petrol was increased from ₹149 to ₹160 per litre, and Xtra Green premium diesel rose from ₹91.49 to ₹92.99.

Commercial LPG has also seen sharp increases. In Delhi, a 19-kg commercial LPG cylinder was reported at ₹2,078.50, up from ₹1,768.50 on March 1. Aviation turbine fuel (ATF) prices in Delhi were also reported to have jumped to ₹2,07,341.22 per kilolitre from ₹96,638.14 per kilolitre, before being revised for domestic airlines to ₹1,04,927 per kilolitre.

Key numbers at a glance

Market impact: inflation sensitivity and household budgets

Fuel prices feed into transport and logistics costs across the economy, and domestic LPG is a direct household expense. Officials said the government is trying to ensure any impact on inflation is minimised, suggesting the timing and quantum are being weighed against broader price stability. The reports also note that any changes would be politically sensitive given the visible effect on consumers.

At the same time, the losses cited by an oil ministry official underscore the financial strain on state-run retailers when pump prices remain unchanged amid rising input costs.

Analysis: what to watch over the next week

Two moving parts stand out in the reporting. First is global crude, which has been swinging sharply due to the West Asia conflict and shipping constraints through the Strait of Hormuz. Second is the domestic balance the government is trying to strike between cushioning OMCs and limiting inflation.

The reports indicate that the decision window is near, with sources pointing to 5-7 days for a call. Until then, the government’s signals suggest it is watching crude price levels and geopolitical developments closely before deciding on any retail revision.

Conclusion

Government sources say petrol and diesel could be increased by ₹4-5 per litre and domestic LPG by ₹40-50 per cylinder, potentially ending a near four-year freeze in pump prices since 2022. A final decision is pending, with officials indicating a possible call within the next 5-7 days as crude prices stay elevated and volatile due to West Asia tensions.