A new report says India still recorded among the smallest fuel price hikes globally, even as crude shocks strained government finances and fuel retailers.
After keeping petrol and diesel prices largely unchanged for more than two months despite severe volatility in global energy markets, India has begun a phased fuel price revision. However, a new report, quoting government data, suggests that even after the latest increases, India remains among the countries with the smallest fuel price hikes globally during the recent crude oil shock.
According to the report, Petrol and Diesel: The Architecture of Consumer Protection, fuel prices were kept steady for 76 days during the Hormuz disruption, with oil marketing companies (OMCs) and the government absorbing rising costs before eventually implementing revisions. Across three separate price changes announced on May 15, May 19 and May 23, petrol prices increased by a cumulative ₹4.74 per litre, while diesel prices rose ₹4.82 per litre.
The latest revisions come after a period of extraordinary turbulence in global crude markets, with supply concerns and geopolitical tensions pushing prices sharply higher. But compared with major economies around the world, India’s fuel price increase has remained relatively modest.
Lowest fuel price increase
The report highlighted that between February and May 2026, India recorded a fuel price increase of around 5%, among the lowest globally outside heavily subsidised oil-producing nations.
Other developed economies also saw substantial rises, including the United Kingdom at 19.2% and Japan at 9.7%. Saudi Arabia reported no increase due to direct domestic subsidisation.
International comparisons show that India witnessed a relatively modest increase in fuel prices despite the recent crude oil shock. According to the report, Myanmar recorded the steepest petrol price rise at 89.7%, followed by Pakistan at 54.9%, the UAE at 52.4% and the United States at 44.5%.
Several developed economies also experienced notable increases, with the United Kingdom reporting a 19.2% rise and Japan 9.7%. In comparison, India's petrol price increase stood at around 5%, placing it among the lowest among major economies. Saudi Arabia recorded no increase, supported by its domestic energy subsidy framework.
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The report argues that India’s smaller increase was made possible because retail fuel prices were not immediately adjusted in line with international crude movements.
Financial pressure
The global oil shock created enormous pressure on the domestic fuel pricing system. During the Hormuz disruption, Brent crude reportedly climbed to nearly $126 per barrel, resulting in substantial under-recoveries. At the peak of the crisis, the government was effectively absorbing around ₹24 per litre on petrol and ₹30 per litre on diesel, while losses at the refinery gate were even higher.
Before the phased revisions began, state-run OMCs were reportedly incurring losses of approximately ₹1,000 crore per day. After the fuel price increases, daily losses reportedly eased to around ₹750 crore, although the financial burden did not disappear entirely.
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Government intervention and tax relief
The report also noted that the Centre intervened through tax measures. On March 27, 2026, the government reduced Special Additional Excise Duty (SAED) on fuels, a move estimated to cost the exchequer nearly ₹30,000 crore in the current fiscal year.
The study further stated that India cut fuel prices multiple times during recent global energy disruptions, including periods linked to the Russia–Ukraine conflict and supply disruptions in West Asia.
Meanwhile, fuel prices continue to vary significantly across Indian states due to differing VAT structures. States such as Andhra Pradesh, Telangana and Kerala recorded some of the highest fuel prices after the latest revisions, while Gujarat, Uttar Pradesh, Delhi, Haryana, Goa and Assam remained among lower-priced markets.
The report concluded that while consumers are now seeing fuel price hikes after a long freeze, India’s increase remains relatively limited when viewed against global peers that passed through a much larger portion of rising crude costs directly to consumers.
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Published on: May 23, 2026 1:03 PM IST
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