Whalesbook
India's government has firmly stated that retail prices for petrol and diesel will not be adjusted. This means public sector oil marketing companies (OMCs) must absorb substantial daily losses. These under-recoveries are reportedly ₹20 per litre for petrol and ₹100 per litre for diesel. The combined daily hit for OMCs is approximately ₹2,400 crore as of March 27, 2026. Officials attribute this to significant volatility in international crude oil markets, noting the Indian crude basket price has surged from an average of $70 per barrel in FY26 to over $113 per barrel in April 2026.
Rising Import Costs
Despite importing less crude oil, India's daily import bill has risen by $190-210 million. A senior official from the Ministry of Petroleum & Natural Gas confirmed "no such proposal is under consideration by the government" for price increases following state assembly elections. The government aims to maintain consumer price stability, having kept retail prices unchanged since April 6, 2022, despite global benchmark fluctuations. As India imports over 88% of its crude oil, it is highly vulnerable to higher oil prices, especially with a weaker rupee threatening the current account deficit. Each $1 increase in crude oil prices adds about ₹16,000 crore to the annual import bill, which was $137 billion in FY25.
Government Support Measures
To counter surging international crude prices, the government previously cut excise duty on petrol by ₹10 per litre to ₹3. It also eliminated excise duty on diesel, reducing it from ₹10. A windfall tax on diesel and jet fuel exports was also introduced, aiming to encourage refiners to prioritize domestic supply. Officials noted a significant gap between international LPG benchmarks and domestic prices: international rates rose 102% between July 2023 and April 2026, while domestic LPG prices fell 17% over the same period. These actions show the government's efforts to shield consumers from price shocks.