India has increased petrol and diesel prices for the fourth time in May, adding more pressure on households and businesses already struggling with rising living costs. The latest adjustment comes as global crude oil prices continue to surge following ongoing tensions in the Middle East and supply disruptions affecting major shipping routes.
State-owned fuel retailers, including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, announced another increase in fuel prices across the country.
In New Delhi, petrol prices climbed by 2.61 rupees per litre to reach 102.12 rupees, while diesel prices rose by 2.71 rupees to 95.20 rupees per litre. The latest increase means petrol prices have now jumped by nearly 7.8% in less than two weeks, while diesel has risen by about 8.6%.
Why India Is Raising Fuel Prices
The repeated hikes are largely linked to soaring international crude oil prices triggered by the ongoing Iran conflict and disruptions around the Strait of Hormuz, one of the world’s most important oil transit routes.
India, which is among the world’s largest oil importers, has been heavily affected by the supply uncertainty. The weakening Indian rupee has also made fuel imports more expensive, increasing pressure on oil marketing companies.
Analysts say the government had previously frozen retail fuel prices for nearly four years despite fluctuations in global oil markets. However, maintaining the subsidy-like pricing system became increasingly difficult as crude prices continued rising.
Inflation Concerns Grow
Economists warn that the higher fuel prices could worsen inflation across India. Transport costs are expected to rise, potentially leading to more expensive food, consumer goods, and services.
Financial experts estimate that the fuel price hikes could significantly impact the country’s consumer price index in the coming months. Some analysts now expect inflation to rise above earlier projections if global oil prices remain elevated.
The Reserve Bank of India is also under pressure ahead of its upcoming monetary policy meeting, where officials may reconsider interest rate decisions due to growing inflation risks.
Fuel Demand Continues Rising
Despite the higher prices, fuel demand in India remains strong. Retail diesel sales reportedly increased by 18% in May compared to the same period last year, while petrol sales rose by 14%.
Industry experts say many bulk fuel buyers have shifted purchases to cheaper retail stations, leading to shortages in some regions and further straining supply networks.
Impact on Indian Consumers
The continued rise in petrol and diesel prices is expected to hit millions of Indian consumers hard, especially middle-income households and transport-dependent businesses.
Public transport operators, logistics companies, and farmers are among the sectors likely to face the biggest challenges as fuel expenses continue increasing.
Meanwhile, investors reacted positively to the latest price hikes, with shares of major Indian oil companies rising sharply after the announcement.
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