Fuel prices in major Indian cities held steady on Monday, May 11, 2026, offering a period of respite to consumers even as global crude oil markets remain volatile. This stability comes despite substantial financial under-recoveries for state-owned oil marketing companies (OMCs), which are reportedly facing losses of approximately ₹30,000 crore per month.
A Precarious Equilibrium
The current pause in price revisions follows the recent declaration of state election results and comes amid heightened political sensitivities. Public sector oil companies, including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, have been absorbing a significant portion of the global price shock. This has involved substantial tax cuts, with excise duty on petrol reduced to ₹3 per litre from ₹13, and diesel excise duty lowered to zero from ₹10 per litre. These measures have resulted in a monthly revenue hit of around ₹14,000 crore for the government. Despite these efforts, officials indicate that the losses are becoming unsustainable, with estimates suggesting OMCs are incurring ₹1,600-1,700 crore daily to maintain current prices.
Global Pressures and Domestic Resilience
Globally, the energy markets remain on edge due to escalating geopolitical tensions in West Asia and disruptions to key shipping routes. Crude oil prices have surged, with Brent crude hovering near $105 per barrel. This international turmoil has led to fuel rationing and steep price hikes in many countries. However, India has largely avoided immediate fuel shock and public panic through a combination of government intervention, supply diversification, and tax adjustments. The government and OMCs have reportedly been absorbing nearly ₹24 per litre on petrol and around ₹30 per litre on diesel at the peak of the crisis.
Signs of an Impending Adjustment
Despite the current stability, the situation is precarious. Prime Minister Narendra Modi's recent appeal to citizens to use petrol, diesel, and gas "with great restraint," suggesting measures like public transport, carpooling, and reviving work-from-home practices, signals a potential shift. This call for conservation, coupled with the ongoing financial strain on OMCs, suggests that a price increase may be inevitable soon. Sources indicate that a hike of ₹4 to ₹5 per litre on petrol and diesel is being reviewed, with a potential increase in domestic LPG cylinder prices also on the cards. The timing and quantum of any such increase will likely be decided by the government, as the current strategy of absorbing losses cannot continue indefinitely. As of May 11, 2026, petrol prices in Mumbai stand at ₹103.54 per litre, while in Delhi, they are priced at ₹94.77 per litre.