Consumers across India are facing a significant increase in fuel prices, effective May 15. The rates for LPG, CNG, petrol, and diesel have been hiked, marking the first such rise in over four years.
Energy companies announced a Rs 2 per kilogram increase for Compressed Natural Gas (CNG), while petrol and diesel prices each saw a jump of Rs 3 per litre. This move comes amidst growing financial strain on fuel retailers, grappling with a sharp surge in global crude oil prices.
Reasons Behind the Price Hike
The primary driver for these rising costs is the ongoing conflict in West Asia, which has severely disrupted global energy supplies. Specifically, a US-Israel attack on Iran on February 28 and Tehran's subsequent retaliation effectively led to a blockade of the Strait of Hormuz. This critical waterway accounts for approximately one-fifth of the world's oil and gas shipments, making India, a major energy importer, particularly vulnerable to supply disruptions and price volatility.
The timing of the price adjustments is notable, occurring 16 days after assembly elections concluded in Assam, Kerala, Tamil Nadu, and West Bengal. Fuel prices had remained stable throughout the polling period, despite rising international oil costs.
Latest Fuel Prices on May 15
14.2 kg Domestic LPG Cylinder Rates
- Delhi: ₹913
- Bengaluru: ₹915.50
- Hyderabad: ₹965
- Mumbai: ₹912.50
- Chennai: ₹928.50
- Kolkata: ₹939
19 kg Commercial LPG Cylinder Rates
- Delhi: ₹3,071.50
- Bengaluru: ₹3,152
- Hyderabad: ₹3,315
- Mumbai: ₹3,024
- Chennai: ₹3,237
- Kolkata: ₹3,202
CNG Prices (per kg)
- Delhi: ₹79.09
- Bengaluru: ₹92
- Hyderabad: ₹93.50
- Mumbai: ₹83
- Chennai: ₹93.50
- Kolkata: ₹95.50
PNG Prices (per SCM)
- Delhi: ₹47.90
- Bengaluru: ₹52
- Hyderabad: ₹51
- Mumbai: ₹50
- Chennai: ₹50
- Kolkata: ₹50
Government Measures and International Diplomacy
In response to the escalating crisis, Prime Minister Narendra Modi has urged citizens to adopt judicious fuel consumption practices. His recommendations include increased use of public transport, opting for work-from-home arrangements, and deferring non-essential expenditures like gold purchases and foreign travel for a year to conserve foreign exchange.
Concurrently, the government has intensified efforts to streamline domestic energy use, pushing households with Piped Natural Gas (PNG) connections to surrender their subsidised domestic LPG connections. A government directive mandates that PNG consumers cannot apply for new domestic LPG connections, and existing LPG supply will cease after three months if a household doesn't switch to PNG where available.
On the international front, India is set to finalize two crucial agreements with the UAE concerning LPG and strategic petroleum reserves during Prime Minister Modi's visit on May 15. This visit follows the UAE's decision to exit the Organisation of the Petroleum Exporting Countries (OPEC) and aims to bolster bilateral trade and investment. These agreements are vital for securing India's energy supplies amid global uncertainties, especially after US President Donald Trump reportedly rejected Iran's proposal to end the West Asia conflict.