Petrol, Diesel Prices Surge by Rs 3 as West Asia Tensions Push Up Crude Costs

Fuel prices climbed sharply across the country on Friday as oil marketing companies grappled with mounting losses stemming from the West Asia crisis and surging crude oil rates.

The increase, which took effect immediately, saw petrol and diesel prices jump by Rs 3 per litre nationwide. In Delhi, petrol climbed to Rs 97.77 per litre, a rise of Rs 3.14, while diesel increased by Rs 3.11 per litre. Hyderabad motorists faced petrol at Rs 110.78 per litre, with diesel climbing to Rs 98.90 per litre.

Compressed natural gas prices also rose, jumping by Rs 2 per kilogram. Delhi's CNG price reached Rs 79.09 per kilogram following the adjustment.

Financial Strain Mounts for Oil Companies

State-run oil retailers are struggling under severe financial pressure as they continue purchasing crude at elevated international rates while maintaining controlled domestic prices. According to Sujata Sharma, Joint Secretary in the Union Petroleum Ministry, the combined monthly under-recovery across petrol, diesel, and LPG has reached approximately Rs 30,000 crore.

The government has sought to shield consumers from sharp price spikes by reducing excise duties on petrol and diesel, a measure that has cost the Centre nearly Rs 14,000 crore monthly in foregone revenue. Despite these interventions, the gap between acquisition costs and retail prices continues to widen.

Crisis Could Wipe Out Annual Profits

Petroleum Minister Hardeep Singh Puri warned of dire consequences if current conditions persist. Speaking at the CII Annual Business Summit 2026, he stated that oil companies are currently sustaining losses of approximately Rs 1,000 crore daily. Should these trends continue, combined quarterly losses could reach nearly Rs 1 lakh crore.

Puri cautioned that a single quarter of losses at prevailing crude price levels would eliminate the entire annual profit after tax of state-run fuel retailers for FY26. Industry projections suggest that Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum could collectively report losses approaching Rs 1.2 lakh crore in the first quarter of FY27 alone.

Global crude oil prices have breached the $100 per barrel threshold, driven by concerns over extended supply disruptions linked to US-Iran tensions. The Middle East conflict has intensified financial headwinds for India's fuel retailers, pushing them toward the difficult decision to raise consumer prices.