Petrol, Diesel Prices Hiked by ₹3 Per Litre Amid Rising Crude Costs From US-Iran Conflict

May 16, 2026

India on Friday increased retail prices of petrol and diesel by ₹3 per litre each, marking the first major fuel price revision in several years amid soaring global crude oil prices triggered by tensions in West Asia and the ongoing US-Iran conflict.

State-run oil marketing companies implemented the hike following sustained losses caused by rising international crude prices and disruptions around the Strait of Hormuz, one of the world’s key oil transit routes.

Fuel Prices Rise Across Major Cities

Following the revision, petrol prices in Delhi rose from ₹94.77 to ₹97.77 per litre, while diesel prices increased to ₹90.67 per litre. Fuel rates also climbed across Mumbai, Kolkata, Chennai, Bengaluru and several other cities.

Officials said the increase was necessary to partially offset mounting under-recoveries faced by oil companies due to elevated crude oil prices over the past few months. Analysts noted that the ₹3 hike may not fully compensate for losses and additional revisions could follow if crude prices remain high.

West Asia Crisis Pushes Up Crude Oil

Global crude oil prices surged after escalating tensions between the United States and Iran raised concerns over possible disruptions in oil supply routes. The Strait of Hormuz, through which a large share of global oil shipments pass, remains under close watch amid the conflict.

Energy experts warned that continued geopolitical instability could further increase crude oil prices and put pressure on fuel-importing countries like India.

Inflation Concerns and Political Reactions

The fuel price increase comes days after Prime Minister Narendra Modi urged citizens to reduce fuel consumption, work from home where possible and adopt energy-saving measures amid concerns over global energy supply disruptions.

Opposition parties criticised the government over rising inflation and increasing household expenses. Economists warned that higher fuel prices could increase transportation costs and trigger price rises across several sectors of the economy.