The government is considering a long-awaited revision in retail fuel prices, with top official sources indicating that petrol and diesel could be hiked by ₹4–5 per litre, while domestic LPG cylinders may see an increase of ₹40–50.

If approved, this would mark the first increase in petrol and diesel prices in nearly four years. Retail fuel prices have largely remained frozen since 2022, even as global crude oil markets have turned volatile in recent months.

Officials said the government is closely monitoring the evolving situation in West Asia, which has triggered a sharp rise in global crude oil prices. A final decision is yet to be taken, but sources suggest that a call on the proposed hike could be made within the next 5–7 days.

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The surge in crude prices has begun to strain the finances of oil marketing companies (OMCs), which have been absorbing higher input costs without fully passing them on to consumers. This has led to mounting under-recoveries, prompting renewed discussions within the government on revising retail prices.

At the same time, elevated crude prices are also exerting pressure on government finances, increasing the fiscal burden through higher subsidy outgo and potential revenue trade-offs.

Sources indicated that internal deliberations are currently underway, with multiple options being evaluated to balance the competing priorities of fiscal stability and consumer protection.

“The government is making all efforts to ensure that any impact on inflation is minimised,” a person aware of the discussions said.

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A calibrated hike, if approved, is expected to be structured in a way that avoids a sharp spike in retail inflation, especially at a time when food prices remain sensitive and global uncertainties persist.

The final decision will likely depend on how global crude prices move in the coming days, as well as the trajectory of geopolitical tensions in key oil-producing regions.

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Published on: May 1, 2026 6:52 PM IST