Petrol, diesel prices may rise ₹5/litre after May 15, 2026

Why a fuel price revision is back in focus

Petrol and diesel prices in India are again in the spotlight as global crude oil prices rise and tensions in West Asia add uncertainty to supply routes. Economists cited in IndiaToday.in said India is nearing a “fuel pricing inflexion point” as Brent crude climbs back above $105 a barrel. The trigger, they said, is less about a discretionary policy choice and more about how long oil marketing companies (OMCs) and public finances can absorb higher input costs. Reports and brokerage notes published in recent days also point to a growing mismatch between global procurement costs and retail selling prices that have remained largely unchanged since early April 2022.

Several reports converge on one near-term window. IndiaToday.in said petrol and diesel prices are likely to rise around May 15, while other notes link the timing to the end of state election polling on April 29. Even where the timing differs, the common factor is the same: crude is expensive, and the gap is now visible in OMC under-recoveries.

What could change around May 15

IndiaToday.in, citing earlier reporting and sources, said petrol and diesel prices could be revised upward before May 15 as rising crude squeezes OMC margins. The likely increase discussed by experts was ₹4–₹5 per litre for petrol and diesel. LPG cylinder prices were also flagged as potentially moving up by ₹40–₹50.

Manoranjan Sharma, Chief Economist at Infomerics Ratings, said that with Brent crude above $105 per barrel, fuel price hikes after May 15 are “highly likely”. But he and other experts also stressed the shape of the move matters. Their base expectation is not a single large jump, but smaller increases spread over time to limit a sudden inflation shock.

Gradual hikes seen as the base case

Economists quoted by IndiaToday.in said a sharp one-time increase is unlikely immediately because the government would want to avoid a sudden inflation spike. Sharma said gradual hikes of ₹2–₹4 per litre are more likely to “manage inflation and diffuse the impact.” He added that if crude stays elevated for longer, policymakers could adopt a mixed approach, with an initial correction followed by smaller increases.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, made a similar point. He said increases in diesel, petrol, and even cooking gas are necessary to keep the fiscal deficit within safe limits, and that this can be done gradually rather than via a steep one-off increase.

OMC losses and under-recoveries are central to the debate

Beyond consumer inflation, the biggest pressure point highlighted across reports is the financial strain on state-run fuel retailers. One report said state-run OMCs are grappling with under-recoveries of nearly ₹30,000 crore every month. Separately, Kotak Institutional Equities estimated OMCs are losing nearly ₹270 billion per month due to the gap between crude costs and retail prices.

A senior oil ministry official was quoted as saying state-owned fuel retailers were incurring losses of about ₹20 per litre on petrol and roughly ₹100 per litre on diesel during the prolonged freeze. Another brokerage note from Macquarie put losses at around ₹18 per litre on petrol and ₹35 per litre on diesel, with daily losses earlier estimated at nearly ₹2,400 crore. After an excise duty reduction of ₹10 per litre, Macquarie said losses fell to around ₹1,600 crore per day, but pressure remained.

Crude oil levels and the West Asia risk premium

Multiple data points in the reports show why the cost side has tightened. IndiaToday.in referenced Brent moving back above $105 per barrel. Emkay Global Financial Services said India’s crude basket is around $110 per barrel. Another report described international crude prices surging from $10 to nearly $126 per barrel.

West Asia tensions and concerns around the Strait of Hormuz were repeatedly cited as a key uncertainty. Economists told IndiaToday.in that renewed uncertainty around the US-Iran conflict and the Strait of Hormuz, one of the world’s most important oil shipping routes, is contributing to volatility. Emkay also flagged that a prolonged closure of the Strait could compel the government to increase retail prices.

Government stance: denial of large hike talk, but pressure persists

Brokerage projections include steep numbers, but the Petroleum Ministry has publicly pushed back. Kotak Institutional Equities projected that if crude stays close to $120 per barrel, fuel prices could rise by ₹25–₹28 per litre, though it also said hikes are unlikely to happen all at once and could be phased. After such reports, the Ministry of Petroleum and Natural Gas said there is “no such proposal under consideration by the Government,” and described the reports as misleading.

At the same time, other reports quoted government sources saying a hike in the near future cannot be ruled out. The practical point across the coverage is that while retail petrol and diesel remained unchanged since April 2022, other products have seen revisions. State-run firms have increased prices of commercial LPG, industrial diesel, 5-kg LPG cylinders, and jet fuel supplied to international airlines in line with rising input costs. One report also noted that commercial LPG (19 kg) was recently increased by ₹993, while domestic LPG rates were kept unchanged.

What brokerages and institutions are saying

Emkay expects an initial hike of ₹10 per litre if pressures persist, adding that a steeper move could trigger inflationary pressures and macro risks. Emkay also said if crude remains above $100 per barrel for the next two to three quarters, retail fuel prices could rise by ₹18–₹20 per litre over the next three to six months, though it assigned a low probability to a prolonged geopolitical stalemate.

The International Monetary Fund (IMF) also weighed in, with IMF Asia Pacific Director Krishna Srinivasan suggesting a pass-through of higher crude prices to consumers, while supporting targeted subsidies for poor and vulnerable segments. He argued that at some point “you have to allow price signals to start to flow.” Reports said RBI Deputy Governor Poonam Gupta countered the fiscal space argument in comparative context, indicating India is better placed.

Where prices stand right now in Delhi

Retail pump prices cited in the reports show what a hike would build on. Petrol is priced at ₹94.77 per litre in Delhi, while diesel costs ₹87.67 per litre. Other reports said petrol prices hover around ₹94–₹96 per litre in major cities.

Key figures mentioned across reports

Market impact: inflation, fiscal math, and phased transmission

The near-term market impact discussed by economists is mainly on inflation and fiscal management. A sudden steep hike risks an immediate shock to transportation costs and broader prices, which is why gradual hikes are being positioned as a more manageable path. But the longer prices stay frozen during high crude, the larger the cumulative strain on OMC balance sheets and the more difficult it becomes to manage government finances.

Reports also underline a policy constraint. Even after the ₹10 per litre excise duty cut referenced by Emkay, brokerages still estimate under-recoveries of roughly ₹18–₹20 per litre at current crude levels. That limits room for further broad-based tax relief without expanding fiscal costs.

Conclusion

The reports point to the same tension: retail fuel prices have been stable for years, but crude has moved higher and the financial gap has widened. IndiaToday.in and other coverage suggest May 15 is a key window being watched for the start of a new price cycle, with ₹4–₹5 per litre increases discussed and a gradual approach seen as most likely. The Petroleum Ministry has denied that large hikes are under consideration, but multiple estimates of under-recoveries indicate pressure remains. The next cues will come from crude price movement, developments in West Asia and the Strait of Hormuz, and any formal communication from OMCs or the government on retail pricing.