Fuel Prices Surge Across India Amid Global Oil Shock Triggered by Middle East Conflict

With a third increase in less than nine days, petrol prices in Delhi have risen by Rs 4.75 per litre, marking a 5 percent jump since May 15. Diesel prices have climbed by Rs 4.82 per litre, reflecting a 5.49 percent increase over the same period. The successive revisions have taken place on May 15, May 19, and May 23.

The surge follows escalating tensions in the Middle East, where the conflict has significantly restricted movement through the Strait of Hormuz, sending global crude oil prices to record levels. As international markets reacted with volatility, many economies passed on higher costs to consumers, while India initially maintained stable retail fuel prices.

According to official assessments, India remained the only major economy to keep fuel prices unchanged for the first 76 days of the disruption in the Strait of Hormuz, despite rising global pressures. Authorities noted that the cumulative increase across the three recent hikes remains just under Rs 5 per litre, describing it as relatively lower compared to several global economies.

International comparisons highlight sharper fuel price escalations elsewhere during the same period. Petrol prices reportedly increased by 44.5 percent in the United States between February 23 and May 23. During the same timeframe, fuel prices rose by 52.4 percent in the United Arab Emirates, 54.9 percent in Pakistan, 19.2 percent in the United Kingdom, 16.7 percent in Bangladesh, and 9.7 percent in Japan.

Government sources emphasized that India has prioritised consumer protection and financial stability by absorbing global shocks, managing past liabilities, and mitigating current losses. They also stated that several states with higher fuel taxation are governed by opposition parties, indirectly influencing retail pricing levels.

Additionally, the government highlighted that India was among the few major economies that reduced retail fuel prices during the Russia-Ukraine conflict period. Over the past four years, the administration reportedly reduced central excise duties on petrol and diesel on four occasions, absorbing nearly Rs 30,000 crore in revenue in the most recent cut alone.

Officials further stated that over Rs 1.30 lakh crore in oil bonds from the previous United Progressive Alliance era has been redeemed, underscoring continued fiscal adjustments in the energy sector.

The latest round of fuel price hikes reflects the sustained impact of global geopolitical instability on domestic energy markets, as India navigates between international crude volatility and domestic economic cushioning measures.