- India absorbed Hormuz disruption for 78 days before a Rs 7 per litre fuel hike
- May price hikes raised Delhi petrol to Rs 102.12 and diesel to Rs 95.20
- India's fuel price increase of 7.5% is much lower than global averages of 22-27%
The government has mounted a detailed defence of its fuel pricing strategy following four rounds of hikes in May, asserting that India absorbed the Hormuz disruption for 78 days before passing on a cumulative hike of just over Rs 7 per litre, the smallest material upward movement of any major non-subsidising economy in the world.
This comes on the back of Monday morning's latest price hike averaging around Rs 2.7 per litre, a move that will help oil marketing companies cut their overall losses by at least 44%.
The four phased revisions - on May 15, 19, 23 and 25 - took Delhi petrol from Rs 94.77 to Rs 102.12 and diesel from Rs 87.67 to Rs 95.20.
Government sources pointed out that every major importing economy raised pump prices far more sharply over the same period, with Myanmar hiking 90%, Pakistan 55%, the UAE 52% and the United States 45%.
India's cumulative revision of approximately 7.5% compares with a global weighted average increase of over 22% on petrol and 27% on diesel.
The government noted that at peak Brent of around $126 per barrel during the Hormuz disruption, it was absorbing approximately Rs 24 per litre on petrol and Rs 30 per litre on diesel.
Refinery-gate under-recoveries were even sharper at Rs 26 per litre on petrol and Rs 81.90 per litre on diesel. Daily OMC under-recoveries had reached approximately Rs 1,000 crore at the height of the disruption before the four phased revisions of May progressively reduced the bleeding.
The government also highlighted that India is the only major economy to have cut retail fuel prices through both the Russia-Ukraine crisis and the Hormuz disruption - reducing central excise duties four times since 2021 and absorbing approximately Rs 30,000 crore at the exchequer through the March 27, 2026 SAED cut alone.
Over Rs 1.3 lakh crore of UPA-era oil bond liabilities have been redeemed since 2021, sources added.
On state-level pricing, the government drew a sharp contrast between BJP-ruled states, where petrol is at or below Rs 102 per litre in six states, and opposition-governed states, where Telangana and Kerala retain the highest VAT rates in the country, pushing petrol above Rs 114 and Rs 118 per litre respectively.
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