India raises fuel prices

India’s state-run fuel retailers raised petrol and diesel prices by 3 rupees a litre on May 15, ending a stretch of nearly four years without a broad retail increase. The move came days after Prime Minister Narendra Modi urged Indians to conserve fuel, work from home where possible, use public transport, defer foreign travel and avoid non-essential gold purchases. Officials and ruling-party leaders linked the increase to a global energy shock tied to the Iran crisis and disruptions to oil supplies. Opposition parties responded within hours, saying the government had delayed the decision until after a round of state elections. ### How much did prices go up, and where did they land? On May 15, oil marketing companies raised petrol and diesel prices by 3 rupees per litre across India, according to reports from AP and Indian media. In New Delhi, petrol rose to 97.77 rupees a litre and diesel to 90.67 rupees. In Mumbai, petrol climbed to 106.68 rupees and diesel to 93.14 rupees. The increase was the first material retail revision in about four years, according to multiple reports. State-run retailers dominate India’s fuel market, and the government had previously leaned on them to hold pump prices steady despite higher crude costs. ### Why did the government and BJP say the hike was necessary? India imports about 90% of its oil, leaving it exposed to swings in global crude prices and shipping disruptions. (usnews.com) AP reported that officials tied the increase to higher global oil prices, while other reports linked the pressure to the Iran crisis and the closure of the Strait of Hormuz. (khaleejtimes.com) Amit Malviya, who heads the BJP’s IT department, said on May 15 that the 3-rupee increase translated to roughly 3% on a base price of about 95 rupees a litre. He said public-sector oil companies had absorbed part of the crude-price increase for weeks and described the move as “limited and calibrated.” (usnews.com) The BJP also said India had shielded consumers from the global oil shock for more than two months before passing on part of the increase. Party statements cited steeper rises in some other countries to argue that India’s retail adjustment was comparatively small. (deccanherald.com) ### What did Modi ask people to do before the price increase? On May 10, Modi publicly urged Indians to cut fuel use and adopt voluntary austerity steps as energy pressures built. Reports said he asked people to work from home where possible, use metros and public transport, postpone non-essential foreign travel and defer gold purchases for a year. (newindianexpress.com) Within days, the government also moved on other fronts. Indian media reports said New Delhi raised import duties on gold and silver and took other steps aimed at managing the economic fallout from the West Asia crisis. ### Why did the opposition attack the timing? Rahul Gandhi, president of the Congress party, said on May 15 that the public was paying for the government’s mistakes after the fuel increase. (firstpost.com) Congress leaders said the decision had been held back until assembly elections were over, turning the price revision into a political issue as well as an economic one. (firstpost.com) Mallikarjun Kharge and other opposition figures also said higher pump prices would feed inflation and hurt households already dealing with rising living costs, according to live coverage from Indian outlets. Karnataka leaders, including Chief Minister Siddaramaiah, criticized the impact on commuters and workers. (thehindu.com) ### What happens next for consumers and policymakers? City-wise retail prices are now being updated at fuel stations and by oil companies, and opposition parties have signaled they will keep pressing the government over inflation. Analysts cited by Indian business outlets said further increases could depend on whether crude prices remain elevated and whether supply disruptions persist. (livemint.com) For now, the next concrete marker is the daily publication of revised pump prices in major cities by the oil marketing companies, alongside any further government measures tied to fuel conservation and import costs. (thehindubusinessline.com)