India's oil marketing companies (OMCs) raised petrol and diesel prices by ₹3 per litre each on Friday, 15 May, with the revised rates taking immediate effect across the country, as mounting under-recoveries driven by the West Asia crisis forced the state-run fuel retailers' hand. CNG prices were simultaneously hiked by ₹2 per kilogram, adding to the cost burden on households and fleet operators.

New Fuel Rates in Delhi

In New Delhi, petrol now costs ₹97.77 per litre, up ₹3.14, while diesel has risen by ₹3.11 per litre. The revised CNG rate in Delhi stands at ₹79.09 per kilogram, effective immediately. The hikes apply uniformly to all retail outlets operated by the three major public-sector OMCs — Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL).

The Scale of Under-Recovery

The combined under-recovery on petrol, diesel, and LPG has reached nearly ₹30,000 crore every month, according to Sujata Sharma, Joint Secretary in the Union Petroleum Ministry. OMCs have been absorbing the difference between their crude procurement cost and retail selling prices to shield consumers from the full impact of the global price surge.

'Our OMCs are buying crude oil at higher rates but are not selling at corresponding rates to protect our consumers. This impacts their finances,' Sharma said. She added that the Centre had already cut excise duties on petrol and diesel, sacrificing nearly ₹14,000 crore in monthly revenue, yet under-recoveries continue to widen.

Minister Puri's Warning on FY26 Profits

Petroleum Minister Hardeep Singh Puri, speaking at the CII Annual Business Summit 2026 this week, warned that OMCs are losing nearly ₹1,000 crore every day and that their combined quarterly losses could touch ₹1 lakh crore if current trends persist. He cautioned that a single quarter of losses at prevailing crude price levels could potentially erase the companies' entire profit after tax for FY26.

Industry estimates cited during the summit projected that IOC, BPCL, and HPCL together could report combined losses of nearly ₹1.2 lakh crore in the first quarter of FY27 alone — a figure that underscores the severity of the current energy shock.

Global Crude Above $100 Per Barrel

The immediate trigger is the surge in global crude oil prices past the psychologically significant $100 per barrel mark, driven by fears of prolonged supply disruptions linked to the US-Iran conflict. This comes amid escalating tensions across West Asia, a region that accounts for a substantial share of India's crude imports. Notably, this is not the first time India has faced a triple-digit crude shock — similar pressure in 2022 led to a sequence of retail price hikes before excise cuts partially cushioned the blow.

What Comes Next

With under-recoveries still widening despite the latest hike, analysts will watch whether the Centre opts for additional excise relief or allows OMCs to pass through further costs to consumers. Any sustained crude price above $100 per barrel makes a second round of retail price adjustments increasingly likely. The government's fiscal calculus — balancing OMC solvency against inflation management — will be the defining variable in the weeks ahead.