Commercial LPG prices were raised by Rs 993 per 19 kg cylinder on Friday — the steepest climb in a series of hikes announced since the beginning of 2026. The development came even as global crude oil prices jumped to a four-year high of more than $126 a barrel on Thursday morning, and many remained convinced that a fuel price hike was imminent. Fake notices have circulated via social media platforms for much of this week and Opposition leaders insist that petrol and diesel prices would surge after Assembly elections in multiple states.
But despite steep losses to oil marketing companies in recent weeks, fuel prices continue to remain frozen after a Rs 2 per-litre reduction in March last year. Domestic LPG rates were also left unchanged after a Rs 60 increase in March, and petrol and diesel prices.
“It is inevitable. It is only a matter of time before prices (of petrol, diesel, and domestic LPG) are hiked,” a senior government official told The Indian Express earlier this week.
But nearly a week after Assembly elections concluded across India, the government is yet to implement any such change.
Why are fuel prices not rising?
Retail petrol and diesel prices have remained largely unchanged for the past four years and the government has issued multiple clarifications to insist there are no plans for a hike. This came even as the West Asia conflict pushed crude oil costs up by more than 50% over the past two months and some recent estimates put daily loss at a whopping Rs 2,400 crore.
State-owned Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have weathered significant geopolitical changes and sharp price fluctuations during this time. Crude oil prices rose above $100 per barrel soon after Russia began its invasion of Ukraine, eased to around $70 per barrel earlier this year and swept past the $126 mark on Thursday. The softening of global crude prices had brought a significant revenue boost — with the combined profit of OMCs at a staggering Rs 86,000 crore during FY24 alone. This ‘cushion’ is likely a key factor that is allowing oil companies to absorb the current losses.
The Indian government has also taken steps to alleviate the pressure by announcing Rs 10 per litre excise duty on petrol and diesel in March. According to a recent source-based PTI report, the daily loss number fell to around Rs 1,600 crore after this announcement. But industry sources told PTI on April 14 that the losses in March had already wiped away all gains made by these companies in January and February. The Indian government is also a majority shareholder for multiple OMCs in India and wields unofficial influence over price hike decisions.
“India is continuously working on reducing the cost of crude and gas. Some such circumstances are out of control and hence careful balancing of effect on customers, oil marketing companies and the government is necessary. The capacity to bear the cost shock could be better than we expect with integrated oil companies. Therefore, the government will assess the situation at all stages before deciding to pass on to consumers,” said Deepak Mahurkar. Partner, Priority Accounts Oil & Gas, PwC India.
How bad is the current situation?
Fake notices began circulating widely on social media platforms as West Bengal voted on Wednesday — claimed the government was increasing the cost of petrol and diesel. And a recent report by Kotak Institutional Equities indicated that a case could be made for India to raise prices by Rs 25 to Rs 28 per liter. The government has pushed back against both claims and issued fact-checks to reiterate that the Oil Ministry has no plans to increase the cost of petrol and diesel.
Critics and Opposition leaders have also linked a possible hike to the politically charged assembly elections in Tamil Nadu, West Bengal, Assam, Kerala and Puducherry. Congress leader Rahul Gandhi claimed earlier this week that “everything would become more expensive” once polls concluded on Wednesday.
Govt, OMCs take massive hit
The Petroleum Ministry revealed in early April that oil marketing companies (OMCs) in India were incurring significant losses amid the global surge in oil prices. The Centre had also cut excise duty on both petrol and diesel by Rs 10 in late March — essentially losing out on tax inflow to help oil companies absorb their losses and prevent an immediate hike in fuel prices. The widening gap between input costs and pump prices has left state-run fuel retailers incurring heavy losses – with some estimates pegging daily loss at about Rs 2,400 crore.
“The Government of India has reduced excise duty to keep prices stable, and part of the burden is also being borne by our oil marketing companies. Currently, there is an under-recovery of about Rs 24 per litre on petrol and Rs 104 per litre on diesel,” ANI quoted Sujata Sharma (Joint Secretary in the Oil Ministry) as telling reporters on April 2.
A separate source-based PTI report published nearly two weeks later indicated that the losses have continued to widen.The report indicated that losses on petrol had widened to Rs 18 per litre and to Rs 35 on diesel as state-owned fuel retailers keep pump prices frozen. Oil prices have also climbed steadily since war broke out — from around $65 per barrel at the end of February to $100 in early April. Brent breached $126 a barrel in global markets on Thursday morning amid reports that US President Donald Trump was weighing military options against Iran.
“Every day without a resolution keeps the pressure on. However, spot crude premiums have cooled from extreme highs as refiners cut runs and draw inventories, easing panic buying despite ongoing supply disruption from the Strait of Hormuz closure. India crude oil basket price crossed $140 in the previous month,” noted Navneet Damani – Head of Research, Commodities – Motilal Oswal Financial Services Ltd.
He added that the surge had also led to growing concerns about a rise in the Current Account Deficit.
“These tensions rose outflow from riskier assets and weighed on the rupee as well. Hence, rupee depreciation, outflow from the markets, and rise in deficit are immediate risks and impact amidst the rise in oil prices
‘Everything will get expensive now’: Rahul Gandhi
The Indian government has repeatedly assured that it had no plans to raise fuel prices after the Assembly elections. But the comments were made prior to the final phase of polling on April 29 — and Opposition Leader Rahul Gandhi is already predicting a price hike. Crude oil prices have also risen nearly $15 per barrel over the past 48 hours.
“Election relief over, inflation’s heat is on its way! After April 29th, watch out – petrol, diesel, everything will get expensive. When (crude) oil was cheap, the Modi government pocketed the profits. Now that it’s expensive, it’ll dump the burden on you,” Gandhi posted on X on Tuesday.
The claim has been met with vehement pushback from government officials — with repeated clarifications indicating that no immediate change was planned.
‘No plan to raise fuel prices after polls’: Govt
A senior government official recently dismissed speculation about a hike after polling ended in West Bengal on April 29. The clarification came from the Joint Secretary in the Ministry of Petroleum and Natural Gas during a news briefing on Tuesday to address developments in West Asia.
“There is no proposal to increase petrol and diesel prices…We have seen panic buying in some places. We are in continuous contact with state governments in all these places. All retail outlets are being monitored and supplies are being prioritised (at petrol pumps witnessing increased buying) so that stock availability is ensured and there are no dry-outs,” news agency PTI quoted Sujata Sharma as saying.
The Press Information Bureau also issued a fact check after fake notices claiming a price hike went viral this week.
“An order circulating on social media claims to be issued by the Ministry of Petroleum and Natural Gas, stating that petrol and diesel prices have been increased by Rs 10 and Rs 12.50, respectively. This order is fake. The Government of India has not issued any such order,” read a PIB post on X.