The cost of fuel has surged once again across India’s major cities, marking the second price hike within a single week after oil marketing companies revised retail rates on Monday. This latest round of increases follows a substantial three-rupee-per-litre hike announced just days prior, compounding the financial strain on consumers already grappling with elevated transport and household expenses.
In New Delhi, petrol climbed by 87 paise to ₹98.64 per litre from ₹97.77, whilst diesel rose by 91 paise to touch ₹91.58 from ₹90.67. Among the metropolitan areas, Kolkata recorded the sharpest jump in petrol rates, where prices increased by 96 paise to ₹109.70 per litre, and diesel rose by 94 paise to settle at ₹96.07 per litre. Meanwhile, motorist in Chennai saw petrol become costlier ₹82 paise, reaching Rs 104.49 per litre, as diesel rates moved up by 86 paise to ₹96.11 per litre.
These rapid, successive revisions signal growing pressure on domestic fuel retailers as global crude markets remain highly volatile amidst escalating tensions in West Asia. Just last Friday, a nationwide three-rupee hike had already pushed Delhi petrol from ₹94.77 to ₹97.77 per litre, and diesel from ₹87.67 to ₹90.67. Other cities witnessed similar steep adjustments during that initial hike, with petrol reaching ₹108.74 in Kolkata, ₹106.68 in Mumbai, and ₹103.67 in Chennai. Commuters using public transport have faced additional pressure as compressed natural gas (CNG) prices in the capital were also raised by two rupees, shifting the retail rate from ₹85 to ₹87 per kg.
The primary catalyst behind these domestic adjustments is the sharp rally in international crude oil prices. Brent Crude traded above USD 111 per barrel on Monday, whilst West Texas Intermediate (WTI) crossed the USD 107 mark. Because India relies on imports to meet nearly 85 per cent of its crude oil requirements, domestic retail rates are exceptionally sensitive to such international fluctuations. Adding to this is the fear of supply shortages especially when it comes to possible disruption on the Strait of Hormuz which serves as a crucial shipping point for oil.
Indian refineries have to deal with changes in the way supplies have been coming to them now that the US waiver for trading in Russian seaborne oil has expired. The waiver lapsed over the weekend following a temporary extension by the administration of Donald Trump. Over the past two years, India had utilised heavily discounted Russian crude to successfully buffer its import bills. With this supply cushion now compromised and global oil prices approaching USD 111 per barrel, state-run oil companies have begun passing costs on to consumers after holding retail rates steady for several months.
Should Indian refiners scale back their intake of discounted Russian oil due to compliance and sanctions risks, they will be forced to secure crude from alternative international suppliers. Finding replacement volumes at a time when global output is already squeezed by geopolitical conflicts could significantly inflate India’s import bill, exert downward pressure on the rupee, and fuel broader inflationary trends. Indeed, there will be wider economic implications beyond gas stations, considering that increased cost in transportation and logistics usually lead to increases in food prices, air fares, and overall living costs in Malaysia. The future direction of fuel prices in Malaysia depends entirely on whether oil prices stabilise globally as well as how fast the situation in West Asia settles down.
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