The last time India raised fuel prices, COVID was still the news. There was no Iran war. The Strait of Hormuz was open. Brent was in the $60s. That was four years ago.
On Thursday, the India fuel price hike of ₹3 per litre landed. Delhi petrol jumped from ₹94.77 to ₹97.77. Diesel from ₹87.67 to ₹90.67. CNG up ₹2 a kilo. The first petrol and diesel price increase in four years — and barely a down payment on what’s actually owed.
Why the ₹3 Fuel Price Hike Became Unavoidable
India’s state oil companies — IOCL, BPCL, HPCL — held retail prices steady through state elections, a general election, and a pandemic. They absorbed the difference. By April, they were bleeding roughly ₹30,000 crore every month. The government also raised export duties on petrol, diesel and aviation fuel to keep domestic supply flowing — but that only added to the pressure.
The ₹3 price hike yields ₹4,449 crore in additional monthly revenue. That’s about 15% of the bleed. The freeze didn’t end because the government changed its mind. It ended because the math became impossible — and cheap oil era ended weeks ago.
And the reason the math became impossible has a name.
The War You Didn’t Vote For
Brent crude closed at $109.24 on Thursday — up 67% year-on-year. The cause isn’t speculation or seasonal demand. It’s the Strait of Hormuz, which Iran shut on March 4 after US and Israeli strikes on February 28 — the crisis that reshaped India’s energy map. Twenty per cent of the world’s oil used to move through that channel. India imports 85% of its crude.
JP Morgan thinks oil stays in the low $100s even if Hormuz reopens. Morgan Stanley says $150 by summer if it doesn’t. The ₹3 at your pump is the first instalment of a bill written in the Persian Gulf.
The Timing That Wasn’t Coincidence
The hike landed 11 days after state election results were declared on May 4. Congress called it “Mehngai Man Modi” by lunchtime. BJP pointed out India still recorded the lowest fuel-price increase among major economies. Both are true. Neither is the point.
Wholesale inflation just hit a 42-month high of 8.3%. Economists expect the fuel price hike to push retail inflation up another 10-25 basis points, compounded by the rupee at a record low. SBI Research and others expect more rounds — potentially ₹10 per litre in total — before OMC balance sheets are whole. The Prime Minister has already asked Indians to cut fuel use.
The last time India raised fuel prices, the world was a different place. The next time it raises them — and there will be a next time — the Iran war will still be writing the bill.