Fuel consumers in Delhi are facing higher costs as petrol and diesel prices have been revised upward by ₹3 per litre each, effective May 15, 2026. This significant increase ends a long period of unchanged rates, which had been maintained for several months, notably during the recent state assembly elections.
The new retail prices in Delhi are now set at ₹97.77 per litre for petrol and ₹90.67 per litre for diesel. This adjustment by oil marketing companies (OMCs) reflects accumulated pressures from elevated global crude oil prices and a weakening rupee against the US dollar.
Why the Hike Now?
The timing of this fuel price revision is closely tied to India's electoral calendar. Historically, fuel prices have often been kept stable or on hold in the run-up to state elections to avoid potential voter dissatisfaction. With the 2026 state assembly elections now concluded, the government has moved to address the backlog of unabsorbed cost pressures faced by OMCs.
Global crude oil prices have remained high in recent months, largely due to disruptions in West Asian shipping routes and ongoing tensions around the Strait of Hormuz, a crucial transit point for a significant portion of India's oil imports. While India is diversifying its crude import routes, international price movements still heavily influence domestic rates.
Factors Influencing Fuel Prices
Several key factors determine the retail price of petrol and diesel in India:
- International Crude Oil Prices: As India imports the majority of its crude oil, global price fluctuations have the most substantial impact on what consumers pay at the pump.
- Rupee-Dollar Exchange Rate: A weaker Indian Rupee against the US Dollar increases the cost of importing crude oil, directly pushing up retail fuel prices.
- Government Taxes: Both central and state governments levy taxes (excise duty, VAT) that constitute a significant portion—often over half—of the final retail price. This is why prices vary considerably across different states and cities.
- Transportation Costs: Logistical expenses for moving fuel from refineries to distribution points also contribute to the final price.
Impact on Oil Marketing Companies
According to the Ministry of Petroleum and Natural Gas, OMCs were reportedly absorbing significant under-recoveries due to the gap between international crude prices and domestic retail rates. Last month, these under-recoveries were estimated at approximately ₹26 per litre on petrol and ₹81.90 per litre on diesel, amounting to a combined daily absorption of around ₹2,400 crore. The recent price hike is expected to alleviate some of this financial strain on companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum.