Fuel prices in India have come under pressure since the start of the US-Iran war on February 28, which is now entering its seventh week. The changes come as disruptions in global oil supply have pushed oil prices higher. For example, Brent crude rose more than 50% after the outbreak of hostilities, driven by supply concerns and supply disruptions in the Strait of Hormuz, a key shipping route.
While domestic petrol and diesel prices remained relatively stable during the period due to government interventions and excise duty cuts, other fuels such as aviation turbine fuel (ATF) and premium petrol saw a noticeable increase. Here’s how petrol, diesel and ATF prices have changed since the start of the conflict.
Gasoline and diesel prices
Gasoline and diesel prices in the country remained largely unchanged on Friday, April 17, having barely changed since the conflict in West Asia began. This trend persists despite the sharp increase in world oil prices.
In big cities like New Delhi, the price of petrol continues to be around ₹94.77 per liter and diesel at ₹87.67 per liter, without significant changes in recent weeks. Meanwhile, today’s petrol prices in Mumbai stood ₹103.54 per liter while the price of diesel was ₹90.03.
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However, the price of premium gasoline has increased ₹2.35 per liter from March 20, according to media reports. “The prices of Bharat Petroleum’s Speed, Hindustan Petroleum’s Power and Indian Oil’s XP95 have been increased by ₹2.09– ₹2.35/litre,” ANI reported.
Why did the domestic prices of gasoline and diesel not show a significant increase?
Stability was maintained through government intervention. On March 27, the government announced that it had reduced the excise duty on petrol and diesel by ₹10 per liter with immediate effect. “This decision was taken in response to the steep and rapid rise in international oil prices,” an official statement said. As a result, while global fuel costs have increased, the full impact has yet to be felt on consumers in India.
OMCs revise petrol and diesel prices every day at 6:00 am to keep domestic fuel rates in line with international oil prices and exchange rates. Several factors affect the retail rate, including international oil prices, the rupee-to-dollar exchange rate, and taxes imposed by central and state governments.
Jet fuel prices have risen – has this affected ticket prices?
The price of ATF or jet fuel has more than doubled to a record high ₹2.07 lakh per kiloliter in March. However, the government said domestic airlines will not have to pay the steep increase as there is a mechanism in place to protect them.
The Ministry of Petroleum and Natural Gas had earlier said that the OMC PSUs, in consultation with the Ministry of Civil Aviation, had decided to pass on only a partial, phased increase of 25% (only ₹15/litre) for domestic airlines. In contrast, airlines operating on international routes will bear the full increase in ATF prices in line with what applies elsewhere.
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The aim of this move was to insulate domestic travel costs from substantial increases in international prices while allowing for a gradual adjustment to the aviation sector.
ATF price in Delhi has been increased ₹110,703 per kiloliter, i.e. 114.5%, up ₹207,341 per kl, according to state fuel retailers. ATF, being a fully deregulated product, is priced at prevailing comparative international prices. According to press agencies, this is in accordance with the written agreement with the airlines.
Diesel export duty, ATF hiked – here’s why
A few days ago, the government increased export duty, also known as windfall tax, on diesel ₹34 per liter ₹55.5/litre against the earlier rate ₹21.5/litre with immediate effect, news agency PTI reported.
The export duty on ATF was also increased ₹42/liter from ₹29.5/liter, an increase of ₹12.5/litre, with immediate effect. However, according to the report, the duty on petrol remains zero.
Earlier, in March, the Center had imposed an export duty of Rs ₹21.50/litre for diesel and ₹29.50 per liter for ATF. The increase was intended to increase domestic availability of fuel in the event of supply disruptions. They were also aimed at preventing exporters from taking undue advantage of price differentials as oil prices rose worldwide since the start of the war.
