Petrol, diesel hike buzz dismissed as 'fake'; govt says no proposal under consideration

The Ministry of Petroleum and Natural Gas on Thursday dismissed as “fake” reports suggesting an imminent hike in petrol and diesel prices amid mounting pressure on fuel retailers due to elevated global crude oil prices.

In a post on X, the ministry said, “There are some news reports suggesting a price hike of petrol and diesel. It is hereby clarified that there is no such proposal under consideration by the Government.”

It said that such reports were “mischievous and misleading” and designed to create “fear and panic amongst the citizens”.

“In fact, India is the only country where petrol and diesel prices haven’t increased in the last 4 years. Govt of India and Oil PSUs have taken relentless steps in order to insulate the Indian citizens from steep increases in international prices,” the ministry added.

The clarification came after several media reports, citing a note by Kotak Institutional Equities, indicated that petrol and diesel prices in India could see a sharp increase after the ongoing Assembly elections conclude on April 29.

According to the KIE, the rising gap between international costs and domestic retail prices has made it increasingly difficult for refiners and the government to hold prices steady.

Kotak estimated that a price increase of ₹25–28 per litre may be required if crude sustains near $120 per barrel, although it argued that any revision is likely to be implemented in phases over weeks or months to balance inflation concerns.

Currently, Brent crude is trading at about $104 per barrel amid supply disruptions linked to the Strait of Hormuz, which handles nearly 20% of global oil supplies and about 40% of India’s crude imports.

The Indian crude basket rose by $47 per barrel in March and by $53 per barrel in the first half of April.

Despite a 13–15% decline in import volumes, India’s crude import bill has increased by an estimated $190–210 million per day.

Kotak estimates that refiners are currently bearing an additional burden of around ₹270 billion per month due to the mismatch between global crude prices and domestic fuel rates.

“We believe after the state elections (last voting on April 29), and if there is no truce in West Asia, the retail prices will be hiked… there is a case to raise prices by Rs 25–28/litre,” Kotak said.