Indian consumers are feeling the pinch as petrol, diesel, and CNG prices surged by Rs 3 per litre (or per kg for CNG) across the country in May 2026. The hike comes on the heels of escalating global crude oil prices, fueled by persistent conflict in the Middle East and heightened US-Iran tensions. With petrol now nearing Rs 99 per litre in Delhi and crossing Rs 110 in Kolkata, many are bracing for more shocks at the pump.
Rising Fuel Costs Amid Geopolitical Unrest
Last week, oil marketing companies (OMCs) raised petrol and diesel prices by Rs 3 per litre nationwide—marking the second increase in less than a week. CNG users also faced a double blow, with Indraprastha Gas Limited (IGL) bumping up CNG prices twice within three days in the national capital, pushing rates beyond Rs 80 per kg after a Sunday hike of Re 1 per kg that followed a Rs 2 per kg jump on May 15.
This wave of price hikes is directly tied to the steep rally in global oil prices, as India imports 85-90% of its crude oil. The situation has put significant pressure on India’s foreign exchange reserves and sent shockwaves through household budgets and the transport sector alike. The government, meanwhile, is urging citizens to conserve fuel as the crisis unfolds.
Analysts Warn of More Pain Ahead
Despite the latest Rs 3-4 per litre increase, analysts at Kotak Institutional Equities warn that it’s not enough to stem mounting losses at OMCs. According to Kotak, companies like BPCL, HPCL, and IOC are collectively losing around ₹25,000 crore each month due to under-recoveries. They estimate that petrol and diesel prices may need to climb another ₹13–17 per litre just to offset the ongoing economic fallout from high crude prices and provide relief to OMCs.
Political reactions to the hikes have been swift and sharp. Congress MPs argue that the government’s inability to source cheaper oil and its response to global pressures have left ordinary Indians footing the bill. On the other hand, BJP leaders point out that similar fuel price surges are being witnessed worldwide.
For now, oil company executives say any additional hikes will depend on government approval and global price trends. With the Middle East conflict showing no signs of resolution, Indian consumers and businesses should prepare for a bumpy ride ahead—both at the fuel pump and in the broader economy.
