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Despite rising global crude prices and Hormuz tensions, India’s petrol and diesel prices should stay stable as oil firms absorb losses and monitor supply.
A petrol pump staff checks documents of a commuter at a gas station at Mathura Road, in New Delhi. (IMAGE: PTI)
Retail petrol and diesel prices in India are unlikely to be raised in the near term despite the recent surge in global crude oil, people familiar with the developments told Moneycontrol.
International crude prices jumped nearly 9 per cent after US and Israeli military strikes on Iran and retaliatory attacks by Tehran, fuelling concerns over supply disruptions and higher fuel costs. Brent crude, the global benchmark, climbed close to $80 per barrel, while US-traded crude rose 8.6 per cent to $72.79 from about $67 on Friday.
Despite the rally, pump prices are expected to remain stable for now. Fuel rates have been frozen since April 2022, with state-run oil marketing companies absorbing losses during periods of elevated crude and rebuilding margins when prices ease, according to Moneycontrol.
India imports roughly 88 per cent of its crude requirement, which is processed into fuels such as petrol and diesel, meaning sustained increases in global prices typically translate into a higher import bill.
The three state-run fuel retailers — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — together reported a profit of ₹23,743 crore in the December quarter alone this financial year, according to Moneycontrol.
Officials told Moneycontrol the government continues to follow a calibrated approach that allows oil companies to shore up margins when crude prices are low and cushion consumers when global rates rise. Unless there is a sharp and prolonged spike, retail prices are unlikely to be revised immediately.
“They (oil companies) have enough cushion to sustain this kind of prices spike,” a source with direct knowledge of the matter said. “We have seen prices rise to USD 119 per barrel in June 2022 in the aftermath of Russia’s invasion of Ukraine. That year they had nominal profits but in FY24 they posted record Rs 81,000 crore profit.”
The geopolitical flare-up has also renewed concerns around the Strait of Hormuz, a critical chokepoint through which nearly half of India’s oil imports pass. After the latest attacks, Iran warned shipping away from the strait and insurers reportedly withdrew coverage, effectively halting tanker movements.
“This (closure of Strait of Hormuz) raises the risk of further disruptions in the Red Sea and across the wider Middle East,” Moody’s Analytics said.
Amid the escalating tensions, Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Monday reviewed the supply situation of crude oil, LPG and other petroleum products with senior officials and public sector companies.
“We are continuously monitoring the evolving situation and all steps will be taken in order to ensure availability and affordability of major petroleum products in the country,” the ministry said in a post on X.
Separately, the Department of Commerce under the Ministry of Commerce and Industry held a high-level stakeholder consultation to assess the potential impact of the West Asia crisis on India’s export-import cargo flows, the news agency reported.
The meeting, chaired by Special Secretary Suchindra Misra and Director General of Foreign Trade Lav Agarwal, included logistics firms, shipping lines, customs authorities, financial institutions and export promotion bodies.
According to the ministry, participants discussed routing changes, vessel scheduling adjustments, freight and insurance costs, container availability, and the implications for time-sensitive shipments.
“The discussions covered the need to maintain predictability in cargo movement, minimise avoidable delays, and ensure seamless documentation and payment processes for exporters and importers,” the Commerce Ministry said in a statement.
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March 03, 2026, 01:52 IST
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