Petrol, Diesel and CNG Prices Hiked as Oil Firms Face Massive Losses Amid West Asia Crisis

New Delhi, May 2026 : Oil marketing companies (OMCs) on Friday increased petrol and diesel prices by Rs 3 per litre each across the country as mounting global crude oil prices and the ongoing West Asia crisis intensified financial pressure on state-run fuel retailers.

The revised prices came into effect immediately.

In the national capital, petrol prices increased by Rs 3.14 per litre, taking the retail rate to Rs 97.77 per litre, while diesel prices rose by Rs 3.11 per litre. Similar hikes were implemented in other cities depending on local taxes and transportation costs.

Alongside petrol and diesel, compressed natural gas (CNG) prices were also raised. Oil companies announced an increase of Rs 2 per kilogram in CNG prices with effect from Friday. In Delhi, the revised CNG price now stands at Rs 79.09 per kilogram.

The fuel price revision comes as public sector oil companies continue to absorb heavy losses by keeping retail fuel prices relatively controlled despite a sharp rise in global crude oil prices following escalating geopolitical tensions in West Asia.

According to Sujata Sharma, Joint Secretary in the Union Petroleum Ministry, the combined under-recovery on petrol, diesel and LPG has climbed to nearly Rs 30,000 crore every month.

“Our OMCs are buying crude oil at higher rates but are not selling at corresponding rates to protect consumers. This is severely impacting their finances,” Sharma said.

She also pointed out that the Union government had already reduced excise duties on petrol and diesel, sacrificing nearly Rs 14,000 crore in monthly revenue in an attempt to cushion consumers from the impact of rising international crude prices.

However, despite these measures, losses borne by oil companies continue to widen.

The financial stress on fuel retailers has become a major concern for the government as global crude oil prices surged beyond the psychologically significant $100 per barrel mark amid fears of prolonged supply disruptions linked to the ongoing US-Iran tensions and instability across the Middle East.

Petroleum Minister Hardeep Singh Puri recently warned that the entire annual profits of India’s state-run oil marketing companies could be wiped out if crude prices remain elevated for a prolonged period.

Speaking at the CII Annual Business Summit 2026 earlier this week, the minister said public sector fuel retailers were currently incurring losses of nearly Rs 1,000 crore every day due to rising import costs and controlled retail prices.

He estimated that combined quarterly losses of the companies could reach nearly Rs 1 lakh crore if current market conditions continue.

“The financial stress on state-run fuel retailers has become extremely severe. A single quarter of losses at prevailing crude price levels could potentially erase their entire profit after tax for FY26,” the minister stated.

Industry estimates cited during the summit suggested that the three major public sector fuel retailers — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — could collectively report losses of nearly Rs 1.2 lakh crore in the first quarter of FY27 alone if crude prices remain above current levels.

The latest fuel price hike is expected to have a wider impact on transportation costs, inflation and household expenses, especially at a time when consumers are already grappling with rising food and commodity prices.

Experts believe further fuel price revisions may become unavoidable if global energy markets remain volatile and geopolitical tensions in the Middle East continue to disrupt crude oil supplies.

Team Maverick.