Fuel prices across major Indian cities held steady on June 2, following a series of significant hikes that concluded on May 25. These increases, which saw petrol rise by Rs 2.61 per litre and diesel by Rs 2.71 per litre, were implemented by oil marketing companies to recover mounting losses amidst volatile global energy markets.
The recent price adjustments marked the fourth hike in two weeks, pushing retail rates higher. Factors contributing to this volatility include the ongoing US-Iran conflict and the closure of the Strait of Hormuz, which have kept global crude oil prices elevated, with benchmarks crossing the $100 per barrel mark.
Current Fuel Prices in Key Metros (June 2, 2026)
- Delhi: Petrol Rs 102.12 per litre, Diesel Rs 95.20 per litre
- Mumbai: Petrol Rs 111.18 per litre, Diesel Rs 97.83 per litre
- Hyderabad: Petrol Rs 115.69 per litre, Diesel Rs 103.82 per litre
- Kolkata: Petrol Rs 113.51 per litre, Diesel Rs 99.82 per litre
- Bengaluru: Petrol Rs 110.89 per litre, Diesel Rs 98.80 per litre
- Chennai: Petrol Rs 107.79 per litre, Diesel Rs 99.57 per litre
Understanding Fuel Price Dynamics in India
The retail price of petrol and diesel in India is influenced by a complex interplay of global and domestic factors. At its core, the international price of crude oil, which serves as the primary raw material, dictates a substantial portion of the consumer cost. Fluctuations in global supply and demand, geopolitical events, and production decisions by oil-producing nations directly impact these rates.
Another critical element is the rupee-dollar exchange rate. As India is a net importer of crude oil, a weakening rupee against the US dollar makes crude purchases more expensive, thereby escalating retail fuel prices. Additionally, both central and state governments levy various taxes, including excise duty and Value Added Tax (VAT), which form a significant component of the final price at the pump. These taxes are a primary reason why fuel prices differ considerably across different states and cities.
Furthermore, transportation costs from refineries to distribution points, along with local demand-supply conditions, also contribute to the final retail price consumers pay. Oil marketing companies continuously monitor these variables to adjust prices, ensuring they can cover their operational costs and investment needs.