Why Are Petrol and Diesel Prices Not Falling in India?
Petrol and diesel prices have remained high in India for a long time, leaving vehicle owners waiting for some relief. With fuel prices staying above the ₹100 mark in many cities, the question of when they will come down has become a common concern.
The Central Government has now explained in the Rajya Sabha why fuel prices do not fall quickly, even when there are changes in the global oil market.
Government Says Fuel Prices Are Market-Linked
The Ministry of Petroleum and Natural Gas has clarified that the Centre does not directly set the retail prices of petrol and diesel.
According to Petroleum Minister Suresh Gopi, fuel prices are mainly decided by public-sector oil companies based on market conditions. International crude oil prices and the cost of petroleum products are among the key factors considered while fixing retail rates.
This means changes in global oil prices do not always result in an immediate change in fuel prices at Indian petrol pumps.
How Much Have Fuel Prices Increased?
The government compared fuel price changes in India with those in several other countries between June 2021 and June 2026.
During this period, petrol prices in Delhi increased by around 8.1%, while diesel prices rose by approximately 11.5%.
The government said the increase was much higher in several other countries. Petrol prices reportedly rose by:
- 70.6% in the US
- 59.9% in France
- 51.1% in Germany
- 46.9% in the UK
Prices also increased sharply in some neighbouring countries. Petrol prices reportedly went up by around 160.6% in Pakistan, 148.6% in Sri Lanka and 76% in Nepal.
The government said diesel prices also recorded significant increases in these countries.
Global Crude Oil Prices Rose Sharply
International developments have also played an important role in determining fuel prices.
The government pointed to the conflict in West Asia as one of the factors that pushed global crude oil prices higher. India's average crude oil import price was around $69 per barrel in February 2026. By March, it had climbed to approximately $136.68 per barrel.
Such a sharp rise in the cost of imported crude can put pressure on the domestic fuel market.
Oil Companies Also Absorbed Some Losses
The government said oil companies did not pass the entire increase in costs on to consumers during difficult periods.
Public-sector companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum reportedly faced losses during the first quarter of the 2026-27 financial year.
Among them, Hindustan Petroleum reportedly recorded a loss of around ₹11,526 crore.
The government said these companies absorbed part of the additional cost in an effort to limit the impact on consumers.
Centre Cut Excise Duty in March
The Central Government also took a step to reduce the burden on fuel consumers.
In March 2026, the Centre reduced the excise duty on petrol and diesel by ₹10 per litre each. While the move provided some relief to consumers, it also reduced the government's tax revenue from fuel.
As of now, the Centre has not announced another fresh reduction in excise duty or a new nationwide cut in petrol and diesel prices.
Why Are Fuel Prices Different Across Cities?
Petrol and diesel prices are not the same everywhere in India. Rates can vary significantly from one state or city to another because of differences in state taxes and local levies.
For example, the petrol price mentioned by the government was around ₹102.12 per litre in Delhi, compared with about ₹111.37 in Bengaluru. Mumbai's petrol price was also above ₹111 per litre.
Therefore, even if the basic fuel cost remains similar, the final price paid by consumers can differ because of taxes imposed by individual states and local authorities.
Will Petrol and Diesel Prices Fall Soon?
A fall in global crude oil prices does not automatically mean that petrol and diesel prices in India will immediately decrease.
Retail fuel prices are influenced by several factors, including international crude oil rates, geopolitical conflicts, currency movements, market conditions and central and state taxes.
The government maintains that steps have been taken to protect consumers from sudden increases in global oil prices. However, whether petrol and diesel become cheaper in the coming days will depend largely on international oil prices and other market conditions.
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