India saw much lower hike in petrol/diesel prices than neighbouring and other countries
New Delhi, May 20
India witnessed a relatively much lower hike in petrol and diesel prices as compared to neighbouring and several other countries following the global oil supply disruption that began in February 2026 due to the Strait of Hormuz crisis.
International Brent crude oil prices have surged sharply since the disruption, crossing USD 120 per barrel and currently trading around USD 110 per barrel as global energy supply chains faced pressure and oil inventories were tightened.
The petrol prices in India increased by 4.2 per cent between February and May 2026, while diesel prices rose by 4.4 per cent during the same period.
While as per data by the GlobalPetrolPrices, in comparison, Myanmar recorded petrol price increases of 89.7 per cent and diesel price increases of 112.7 per cent. Several other countries, like Malaysia, Pakistan, Sri Lanka, U.S, China and a number of European countries, also saw high double-digit increases in fuel prices during the same period.
Most of the countries have passed on the increase in crude oil prices directly to consumers, while India implemented multiple excise duty reductions and retail fuel price cuts between 2021 and 2026 to moderate the impact of rising crude oil prices.
As per the government data, these included excise duty cuts in November 2021 and May 2022, retail fuel price reductions in March 2024, another excise reduction in April 2025 and a Special Additional Excise Duty (SAED) reduction announced on March 27, 2026.
The March 2026 SAED cut reduced petrol excise duty to Rs 3 per litre and diesel excise duty to zero.
A part of the increase in global crude oil prices during the Hormuz disruption was absorbed through government revenue adjustments and support from oil marketing companies. The March 2026 excise duty reduction alone could have an impact of around Rs 30,000 crore on government revenues during the fiscal year.
Oil bonds worth around Rs 1.34 lakh crore were issued to oil marketing companies by the UPA government between 2005 and 2010. More than Rs 1.30 lakh crore in principal has since been redeemed along with interest payments over the last few years.
Fuel prices also vary across Indian states due to differences in Value Added Tax (VAT) rates imposed by state governments.
According to the data by govt, Andhra Pradesh, Telangana and Kerala were among the states with relatively higher VAT, translating into higher petrol and diesel prices, while Gujarat, Uttar Pradesh, Delhi, Haryana, Goa and Assam recorded comparatively lower fuel prices because of lower VAT rate.
— ANI
Reader Comments
The article mentions Andhra, Telangana and Kerala have higher VAT on fuel. It's frustrating that despite central excise reductions, state governments still tax heavily. Common man gets squeezed from both sides. Wish all states would reduce VAT like Gujarat or Delhi did.
Interesting perspective from the US. Here in California, we're paying over $6 a gallon for petrol—inflation is really biting. India's approach with excise cuts and absorbing some costs through OMCs seems prudent. Wish our federal government would consider similar relief! 🤔
Good to see government action, but let's not forget the bigger picture. The excise duty cuts and oil bonds from UPA era show fuel pricing has always been politicized. We need long-term energy security, not just temporary relief. Also, higher VAT in states like Kerala needs addressing—why should we pay more just because of state borders? 🙏
As an American living in Mumbai, I can see the difference. Back home, fuel prices doubled almost overnight last year. Here, the impact is more muted. India's policy of absorbing higher costs through bonds and OMC margins is interesting—not perfect, but definitely softer on consumers. Respect.
The government deserves credit for handling the Strait of Hormuz crisis impact well. 4% vs 80-90% hikes in Myanmar, Pakistan—that's a huge difference. But why are states like Telangana still charging high VAT? Centre does its part, states should too. Also, time to accelerate EV adoption and reduce our oil dependence.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.