Petrol-Diesel Price: Fuel price hike outbreak! Petrol and diesel prices likely to increase by ₹2.50; New report ahead

• Fuel price hike outbreak!
• Petrol and diesel prices likely to increase by ₹2.50
• New report ahead

Petrol-Diesel Price News: In the global market by crude oil prices (Crude Oil Prices) have reached highs, Indian consumers are likely to face another big shock in fuel prices in the near future. According to the latest report of the country’s leading rating agency ‘CRISIL’, public sector oil companies to reduce their losses due to the rise in international market prices. of petrol and diesel An additional hike of up to ₹2.50 per liter is highly likely. Interestingly, the country has already seen a huge hike in petrol and diesel prices by around ₹7.50 per liter in just a few days since last May 15. According to CRISIL, if crude oil prices continue to rise at the same pace in the international market, the total price hike by oil companies could go up to ₹10 per litre.

How did fuel prices go up in just 10 days?

Oil companies have taken a big bite out of the common man’s pocket by increasing the prices in stages under ‘Daily Price Revision’.

What will be the effect on retail inflation?

This preliminary hike of ₹7.50 in fuel prices will directly add 36 basis points (0.36%) to the country’s retail inflation. On the other hand, if this overall price hike touches the ₹10 per liter mark, the direct impact on inflation will increase to 48 basis points (0.48%). Costs of transportation, logistics and manufacturing sectors will increase due to the increase in fuel prices, and it is considered inevitable that daily consumption items will become expensive in the coming months.

Kitchen budget will collapse due to expensive freight

Considering the total supply chain in India, about 71 percent of freight is transported through road transport (trucks). Diesel alone accounts for about 42 percent of the total operating costs of truck and logistics operators. Hence, the cost of diesel will increase the freight, which will directly affect the prices of the following commodities:

• Foods: Prices of daily staples like dairy products (milk, curd, paneer), tea, coffee, fresh fruits, pulses, spices, eggs and meat-fish will increase.
• Industrial and other goods: Expenditure on clothing, consumer electronics (TVs, fridges etc.), wooden products, cement, ceramics and construction materials will increase.

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What is the main reason behind the rise in fuel prices?

The main reason for this inflation is the international military conflict between the US and Iran. Crude oil, which was at $70 per barrel in the world market before the conflict started, has now crossed $100. Crude oil averaged $112 per barrel in the first two months of the current financial year (FY27), significantly higher than CRISIL’s full-year estimate of ($95).

Meanwhile, last year’s GST reduction on electronics, automobiles and FMCG (FMCG) products in September 2025 is providing some relief to consumers. However, rising oil prices are neutralizing these comfort factors. The only comforting factor is that the current rate of inflation is still within the RBI’s tolerance band of 2 to 6 percent.

How are the final rates of Petrol-Diesel determined?

The base price of crude oil in the international market reaches the fuel pumps after taxes and costs are added at various stages:

1. Crude Oil (Base Price): India imports 90% of its crude oil requirements, the price of which is determined by the dollar and global market demand.

2. Refining Cost: The cost of refining and refining crude oil by companies adds to their own profits.

3. Excise Duty: Excise Duty and Road Cess levied by the Central Government, which is uniform across the country.

4. Dealer Commission: Petrol pump operators get their fixed commission.

5. VAT: Finally, state governments levy local sales tax (VAT) according to their own policies. As VAT rates are different for each state, petrol-diesel prices are different in different cities.

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