Petrol prices in Delhi crossed ₹102 per litre for the first time on Monday, May 25, after the fourth fuel price hike in 12 days pushed petrol up by ₹2.61 per litre and diesel by ₹2.71 per litre. The hike came on the same day that Brent crude fell over 5% to slip below $100 per barrel on hopes of a US-Iran ceasefire deal, underlining the lag between global oil price movements and domestic retail pricing in India.
Bhavish Aggarwal, CEO of Ola, pointed to an immediate consequence playing out in the EV market. “With the fuel price rise, seeing a lot of demand for our EVs from the gig ecosystem. They need EVs the most as their daily run and fuel cost is the highest,” he said.
With the fuel price rise, seeing a lot of demand for our EVs from the gig ecosystem. They need EVs the most as their daily run and fuel cost is the highest.
— Bhavish Aggarwal (@bhash) May 25, 2026
Revised petrol prices across major cities
| City | New Rate | Hike |
|---|---|---|
| Delhi | ₹102.12 | +₹2.61 |
| Mumbai | ₹111.21 | +₹2.72 |
| Kolkata | ₹113.51 | +₹2.87 |
| Chennai | ₹107.77 | +₹2.46 |
Revised diesel prices across major cities
| City | New Rate | Hike |
|---|---|---|
| Delhi | ₹95.20 | +₹2.71 |
| Mumbai | ₹97.83 | +₹2.81 |
| Kolkata | ₹99.82 | +₹2.80 |
| Chennai | ₹99.55 | +₹2.57 |
Why prices are rising even as crude falls
The timing appears contradictory. Brent crude dropped sharply on Monday on Iran deal optimism, yet domestic fuel prices moved in the opposite direction. The explanation lies in the accumulated under-recoveries that India’s state-owned oil marketing companies have absorbed since the Iran war began on February 28. Indian Oil Corporation, BPCL, and HPCL were collectively estimated to be losing more than ₹1,000 crore every day by selling fuel below cost while importing crude at post-war elevated prices. Over two months, those losses became unsustainable regardless of where crude moved on any single day.
Sourav Mitra, Partner at Grant Thornton Bharat, noted that the back-to-back hikes would offer partial relief to OMCs but not a full cushion. Even if the Middle East situation stabilises, risks around the Strait of Hormuz will take time to fully ease, likely keeping crude above $90 per barrel. Combined with a weakening rupee amplifying import costs, OMC margins continue to face pressure and further calibrated price revisions may still be required.
What this means for inflation
The diesel hike carries the broader inflationary consequence. Diesel powers India’s logistics network, freight transport, farm equipment, and last-mile delivery chains. A ₹2.71 per litre increase raises operating costs for every truck, tractor, and delivery vehicle in the country, pushing up the price of milk, vegetables, packaged goods, and freight-linked commodities that had already absorbed cost increases from the previous rounds of hikes.
The four-year context
Fuel prices in India had been stable since April 2022, with the government cutting prices by ₹2 per litre ahead of the 2024 Lok Sabha elections. The current sequence is the first sustained fuel price increase in four years. The previous hike on Saturday, May 23 raised petrol by 87 paise and diesel by 91 paise, with CNG prices in Delhi also rising ₹1 per kg to ₹81.09. The cumulative increase in petrol prices now exceeds ₹7 per litre over the 12-day window, a pace without precedent in recent memory. The combination of the Iran war supply shock, a rupee at record lows, and OMC balance sheets under severe strain has forced the government’s hand in ways that domestic political calculus alone would not have permitted.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.