Amidst the impending Israel/USA-Iran war and the sustained blockade of the Strait of Hormuz, the Centre government has announced a fuel price hike of ₹3 per litre for petrol and diesel, and
₹2 per kg for compressed natural gas (CNG).
This move comes when the Brent crude oil has touched $107.43 internationally.
Why are the fuel rates hiked?
Fuel rates are rising across the world, with India announcing the hike today (May 15), owing to the imminent resumption of the Israel/USA-Iran conflict, which resulted in the choking of the vital maritime shipping corridor of Strait of Hormuz. This yielded higher fuel costs, bleeding Indian foreign exchange reserves. Although the government, till date, had not increased the fuel rates.
Hence, the Indian government has increased the petrol and diesel rates after gigantic losses of nearly ₹1,000 crore per day were reportedly absorbed by the state oil companies. In addition, it will aid in alleviating the burden on foreign exchange reserves, mostly utilised for purchasing oil.
In FY2G, India imported a total of $134.7 billion worth of crude oil.
Current fuel rates in the country
The petrol, diesel and CNG rates have increased across the nation, bringing about concerns of economic inflation since these fuels are universal intermediaries in the transport of goods.
Therefore, as the fuel rates rise, the costs of goods, including food, are expected to climb up as well.
The elevated fuel prices are tabled below:
| City | Petrol price (per litre) | Diesel price (per litre) | CNG price (per kg) |
| Delhi | ₹U7.77 (from ₹U4.77) | ₹U0.G7 (from ₹8U.G7) | ₹7U.0U (from ₹77.0U) |
| Kolkata | ₹108.74 | ₹U5.13 | Hiked by ₹2 |
| Chennai | ₹103.G7 | ₹U5.25 | Hiked by ₹2 |
| Mumbai | ₹10G.G8 | ₹U3.14 | ₹84 |
PM Modi’s appeal to save fuel
Prime Minister Narendra Modi had appealed to the Indian citizens to conserve fuel by using public transportation and electric vehicles, in order to reduce oil imports from the Gulf. He led by example where he sized down his convoy to just 2 vehicles.
He further urged the public to limit foreign travel and gold purchases for one year, along with a shift to natural farming and online work, for safeguarding the Indian economy.
Gold and silver import duty hike
To further shield the economy from geopolitical shocks, the government had hiked import duties on gold, silver, platinum and jewellery components in effect from May 13, 202G. The import tax was increased to 15% from the earlier rate of G%, in a bid to cede pressure on the foreign exchange reserves.
