Compressed natural gas (CNG) prices were hiked by Rs 2 per kg on Tuesday, May 26, marking the fourth increase in less than two weeks, as fuel retailers continued to pass on the impact of elevated global energy prices triggered by the Iran conflict.
The latest revision takes the cumulative increase in CNG prices since mid-May to Rs 6 per kg. The hike follows earlier increases of Rs 2 on May 15 and Re 1 each on May 18 and May 23.
The rise in CNG prices comes alongside another sharp increase in petrol and diesel rates. State-run fuel retailers on Monday raised petrol prices by Rs 2.61 per litre and diesel by Rs 2.71 per litre, taking the cumulative increase in auto fuel prices since May 15 to nearly Rs 7.5 per litre.
Petrol, diesel price hike
In Delhi, petrol prices rose to Rs 102.12 per litre from Rs 99.51, while diesel climbed to Rs 95.20 from Rs 92.49, according to industry sources. Fuel prices have now reached their highest levels since May 2022 after remaining largely unchanged for more than two years, except for a Rs 2-per-litre cut announced in March 2024 ahead of the Lok Sabha elections.
The repeated revisions follow a surge in global crude oil prices after escalating tensions in the Middle East disrupted shipping movement through the Strait of Hormuz, a key route for global energy supplies. Brent crude had climbed sharply since late February following US-Israeli strikes on Iran and fears of prolonged supply disruptions.
However, crude prices eased on Monday, with Brent falling more than 5 per cent amid tentative hopes of de-escalation after reports suggested that the US and Iran had agreed in principle to reopen the Strait of Hormuz.
State-owned retailers — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) — had delayed passing on higher fuel costs for several weeks. The government said the move was aimed at protecting consumers from inflationary pressures, while opposition parties accused it of postponing price hikes until after key state elections.
Hikes shortly after BJP wins in 3 of 5 Assembly, UT elections
The first hike in the current cycle came on May 15, shortly after the Bharatiya Janata Party (BJP) registered victories in three of five Assembly and Union Territory elections, including West Bengal.
Fuel prices have since been revised multiple times. Petrol and diesel were first increased by Rs 3 per litre on May 15, followed by a 90-paise hike on May 19. Another revision on May 23 raised petrol prices by 87 paise and diesel by 91 paise per litre.
Domestic LPG cylinder prices have also risen by Rs 60 per 14.2-kg cylinder since the start of the current fuel price revision cycle.
Despite the repeated hikes, industry sources said petrol, diesel and LPG continue to be sold below cost by state-run retailers. However, oil companies have so far avoided increasing aviation turbine fuel (ATF) prices.
Fuel rates vary across states due to differences in local taxes and levies. After Monday’s increase, petrol prices in Mumbai rose to Rs 111.21 per litre and diesel to Rs 97.83. In Kolkata, petrol was priced at Rs 113.51 and diesel at Rs 99.82 per litre, while Chennai recorded petrol at Rs 107.77 and diesel at Rs 99.55.
Private fuel retailers have also revised prices upward. Nayara Energy had earlier increased petrol and diesel prices by Rs 5 and Rs 3 per litre respectively in March, while Shell raised petrol prices by Rs 7.41 and diesel prices by up to Rs 25 per litre from April 1. Jio-bp, the joint venture between Reliance Industries and BP Plc, also aligned prices with state-run retailers.
Economists warned that the continuing fuel price hikes are likely to increase transportation and logistics costs, adding further pressure on inflation.
India’s retail inflation rose to 3.48 per cent in April from 3.40 per cent in March, while wholesale inflation touched a 42-month high of 8.3 per cent, driven mainly by rising fuel and energy costs.
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