New Delhi: An increase in petrol and diesel prices in the near future has not been ruled out, government sources said on Friday, as mounting losses weigh on state-run fuel retailers after nearly four years of frozen retail rates.

The signal comes amid a sharp rise in global crude prices, even as oil marketing companies continue to hold pump rates steady.

Global crude spike keeps pressure on domestic pricing

International crude oil prices climbed to a four-year high of USD 126 per barrel this week before easing slightly, but remained above USD 110. The rise comes as ship transits through the Strait of Hormuz stayed restricted, while US and Iranian leaders exchanged barbs amid stalled peace talks.

Prices had already surged after the US and Israel attacked Iran on February 28, followed by Tehran’s sweeping retaliation that effectively shut the Strait of Hormuz — a key energy artery linking the Persian Gulf to global markets and handling roughly a fifth of global oil trade, along with large volumes of liquefied natural gas.

Crude, which stood at USD 70 per barrel last year, has averaged over USD 114 this month.

Retail rates unchanged despite rising costs

Earlier in the day, Indian Oil Corporation (IOC), speaking on behalf of the industry, said petrol, diesel and domestic LPG prices are not being increased despite a surge in international energy costs.

However, state-owned firms have raised prices of commercial LPG, industrial diesel, 5-kg LPG cylinders and jet fuel sold to international airlines, in line with rising input costs.

Retail petrol and diesel prices have remained frozen since early April 2022, a period marked by fluctuations in global oil markets. When prices fell, state-run firms made profits, which were used to offset losses during periods of high crude prices.

At present, petrol is priced at Rs 94.77 per litre in Delhi, while diesel costs Rs 87.67.

Mounting losses, earlier signals of possible revision

Government sources reiterated that the possibility of a price hike “is not ruled out”.

Last week, a senior oil ministry official said at a news briefing that state-owned fuel retailers were incurring losses of about Rs 20 per litre on petrol and roughly Rs 100 per litre on diesel due to the prolonged freeze. Yet there is no plan to increase prices, she had said.

Analysts had earlier flagged a potential increase of Rs 25–28 per litre after the end of polling for assembly elections in West Bengal on April 29.