India has ​lowered windfall ‌taxes on exports of ​petrol, diesel ⁠and aviation turbine fuel (ATF) with immediate effect, ‌according to a government ‌order issued ‌late ⁠on Wednesday (September 16, 2026).

The duty ​on ‌diesel exports has been cut to ₹20 ‌per litre from ​25 earlier. The levy ⁠on export of petrol been ‌cut to ₹0.5 per litre from ₹1.5 earlier.

The ‌tax on ATF has been set ⁠at ₹15 per ⁠litre from ₹19 earlier.

The Commission for Air Quality Management in National Capital Region and Adjoining Areas (CAQM) on Wednesday announced a phased ban on the registration of new petrol, diesel and CNG light goods vehicles (LGVs) in Delhi and the wider National Capital Region (NCR) from next year.

According to its order, the CAQM has prohibited the registration of petrol, diesel and CNG smaller LGVs in Delhi from January 1, 2027. The same ban will come into effect in Gurugram, Faridabad, Sonipat, Ghaziabad and Gautam Buddha Nagar from July 1, 2027. In these cities, only electric smaller LGVs or mini pick-up trucks will be allowed to ply.

For the remaining districts in the NCR, the registration of petrol and diesel smaller LGVs will be banned from January 1, 2028. Both electric and CNG smaller LGVs will continue to be permitted to ply.

Two categories

The CAQM has classified LGVs into two categories. Smaller LGVs fall under category N1 and have a gross vehicle weight of up to 3.5 tonnes. Larger LGVs fall under category N2 and have a gross vehicle weight above 3.5 tonnes and up to 7.5 tonnes.

For the N2 category, the ban will also be rolled out in phases. In Delhi, the registration of petrol, diesel and CNG LGVs will be prohibited from January 1, 2028. In Gurugram, Faridabad, Sonipat, Ghaziabad and Gautam Buddha Nagar, the ban will take effect from July 1, 2028. In these areas, only electric LGVs of the N2 category will be allowed. For the rest of the NCR districts, the ban on N2 LGVs will be limited to petrol and diesel vehicles from January 1, 2029. Both electric and CNG smaller LGVs will continue to be allowed.

The CAQM said the decision was taken because pollution caused by LGVs is disproportionate to their share of the total vehicles. “Though LGVs constitute only about 1.2% of total active vehicle stock across the NCR, their contribution is approximately 3.3% of the PM (particulate matter) emissions. This highlights the importance of steering future LGV sales towards cleaner technologies to avoid the long-term accumulation of high-emitting vehicles,” the order read.

The panel also justified the inclusion of CNG vehicles in the ban. “Though CNG significantly reduces primary particulate emissions compared to diesel, it continues to generate substantial nitrogen oxide (NOx) emissions, a key precursor to secondary PM2.5 (a major pollutant) formation,” the order stated.

Prices of petrol and diesel will come down only after the crude oil, which is currently cheaper, reaches Indian shores and refiners, Union Petroleum Minister Hardeep Singh Puri told reporters on Thursday (July 2, 2026). Thus, indicating that an immediate downward revision may not be possible immediately.

The Petroleum Minister also informed that India’s state-run oil-marketing companies incurred a loss of about ₹74,781 crore from the sale of LPG, petrol and diesel in the June-end quarter.

‘Petrol, diesel from crude purchased months ago’

Mr. Puri elaborated that the retail fuels presently being sold in pumps were derived from crude oil that was purchased months in advance when their prices alongside that of their freight and insurance were elevated because of the conflict in West Asia.

As a routine practice, refiners usually seal their crude oil purchases approximately two months in advance before receiving their physical deliveries.

“The petrol and diesel that you buy from the dispensing stations today is [derived from] that crude oil would have been obtained two months ago,” he said, adding, “So, it was bought at the price available then. The price of crude oil [back then] was not this [that is, the presently lower about $70/barrel] price, cost of insurance and freight was also the price back then.”

Mr. Puri further stated, “Today the crude oil that is sold at $70 per barrel or below will arrive much later.”

Benchmark brent crude futures in April this year had peaked to as much as $110 per barrel-mark at the peak of the West Asia crisis.

Thursday evening, brent crude was trading at a more than four-month low of $70.15 per barrel – declining further than the pre-conflict lows.

Financial strain on OMCs

Speaking to reporters, the Petroleum Minister also stated that under-recoveries, that is, the losses because of a difference between price at which the petrol, diesel and LPG was sold and the essential price required to meet cost of production, all combined stood at about ₹1.89 lakh crore in the June-end quarter.

This includes under-recovery of ₹19,905 crore on petrol, approximately ₹1.45 lakh crore on diesel and ₹24,148 crore on LPG.

‘Not worried about oil prices in future, but must prepare’

Reflecting on how prices may pan out in future, Mr. Puri emphasised, “I am not worried about it, but I have to prepare for it,” adding, “Stocking while [crude oil] prices are low, increasing storage space and intensifying outreach to bilateral partners – all that will go hand in hand.”

Separately, in response to a query from The Hindu about expanding storage capacities, Mr. Puri said India is presently holding crude stocks enough for 76 to 80 days. This is inclusive of crude stocks at ports, refineries, pipelines and strategic petroleum reserves.

He added, “However, after going through a suis generis experience of this kind, you do not want to take any chances, and we will increase.”

‘Russian gasoline exports from traders, not OMCs directly’

Further, in response to queries about India’s state-owned OMCs exporting gasoline to Russia, Mr. Puri said that the purchases might be routed through traders and not directly from the OMCs.

“Our output is also purchased by traders. It is entirely possible that the purchase of the concerned Indian-origin products was made from traders,” he added.

Consumption of petrol and diesel increased 7% and 5.52% respectively in June this year on a year-over-year basis whilst that of aviation turbine fuel (ATF) dipped marginally by 0.6%, according to latest provisional data from the Petroleum Planning and Analysis Cell (PPAC).

June was the first complete month following the average ₹7.5 per litre hike in prices of both petrol and diesel that was done across four tranches.

The latest of these hikes was imposed on May 26.

According to the provisional data, about 3.77 million metric tonnes (MMT) of petrol was consumed in June this year, compared to 3.52 MMT in the same month last year.

Consumption of diesel stood at 8.55 MMT in June this year, higher than 8.105 MMT in the comparable period last year.

Jet fuel consumption, on the other hand, dipped marginally to about 0.73 MMT in the reported month.

Profitability at State-run oil marketing companies (OMCs) is set to improve as falling crude oil prices lift fuel marketing margins, although rising debt levels and uncertainty over fuel taxes could limit the sector’s longer-term earnings outlook, according to a JP Morgan report.

“Composite margins on petrol and diesel sales at State-run refiners and fuel retailers are now above levels seen before the recent Middle East [West Asia] conflict, with gains driven by lower crude prices and reduced central excise duties,” it said.

The start of the West Asia conflict triggered a surge in global oil prices but retail pump rates in India remained steady for large parts and rising only by a fraction of the required increase. Even after the ₹7.50 per litre increase in petrol and diesel prices in May, retail pump rates were lower than the cost.

“Our estimates for OMC composite margins on petrol and diesel are now higher than pre-war levels. Losses on LPG are still elevated, but should also start to track oil down soon,” JP Morgan said adding earnings in April-June — the first quarter of current fiscal year — will likely be hurt by large inventory losses, but 2Q profitability should be better.

“Two issues limit our excitement around this improvement in margins: the OMC will have acquired material debt during the last few months — affecting valuations, and a major part of the restoration of profitability is on account of the reduction in excise duties,” it said. “It is possible that the government keeps taxes low for some time — permitting debt repayment at the OMC. The risk of an eventual increase in excise duties remains.”

The government had cut excise duty on petrol and diesel by ₹10 per litre each in March to avoid an immediate increase in retail prices. The duties may be restored once global oil prices fall to pre-war levels and stabilise.

Among the three State-run OMCs — Bharat Petroleum Corporation Limited, Indian Oil Corporation and Hindustan Petroleum Corporation Limited — BPCL and IOC are expected to benefit the most in the near term if oil prices continue to ease.

The brokerage estimated that the current composite petrol and diesel margins for BPCL and IOCL are higher than pre-conflict levels, while HPCL’s margins have largely returned to or exceeded levels seen before the recent oil price spike. The improvement reflects stronger combined refining and marketing economics, even as standalone fuel marketing margins remain below historical averages.

The stronger margin environment could support earnings from the second quarter onwards, particularly if crude prices remain below $80 per barrel and refining margins stay elevated.

However, first-quarter earnings are likely to remain under pressure due to inventory losses stemming from the recent decline in crude prices. Analysts also expect the three OMCs to report elevated borrowings after absorbing losses on the sale of petrol, diesel and liquefied petroleum gas (LPG) over recent months.

While losses on LPG remain significant, they are expected to moderate as lower oil prices feed through to the sector.

A key factor behind the recovery in fuel margins has been the government’s decision to keep excise duties lower, allowing a larger share of retail fuel prices to accrue to OMCs. Analysts estimate the reduction in excise duties has cost the government roughly ₹1.8 lakh crore annually in forgone revenue. That has raised questions over the sustainability of current profitability levels.

“The government may allow OMCs to retain higher margins for some time to help reduce debt accumulated during recent periods of under-recovery,” analysts said. However, pressure to raise fuel taxes could re-emerge, particularly as the government faces higher expenditure commitments over the next two fiscal years.

As a result, JP Morgan expects OMCs could report strong earnings in the December and March quarters if crude prices remain subdued, but caution that visibility on fuel marketing margins beyond fiscal 2028 remains limited.

The sector is therefore likely to remain a tactical play tied closely to movements in crude oil prices and government tax policy, with BPCL and IOC viewed as the preferred bets in the current environment.

Trade and industry are bracing for tough times ahead, as the decision of State-owned oil companies to raise fuel prices for the fourth time in 10 days on Monday threatens an overall increase in the prices of essential commodities.

It has proved a double whammy for sectors such as hotels and construction, which were already reeling under an exorbitant hike of ₹993 in the price of commercial cooking gas cylinders that came into effect towards the end of last month. The successive fuel price hikes have impacted other sectors as well.

The bustling vegetable market in Ernakulam, primarily dependent on supplies from neighbouring States, is preparing for an inevitable price rise, with transporters likely to increase their charges shortly. Supplies to the market mostly come from Oddanchatram and Pazhani in Dindigul district, Coimbatore, and Cumbum in Theni district of Tamil Nadu, and Bengaluru and Mysore in Karnataka.

“We have a year-long agreement with lorry operators, and hence the recent fuel price hikes haven’t yet affected us. But the frequent hikes may force them to revise the agreement, as it is a matter of survival. Vendors outside the market who don’t have long-term agreements but hire lorries on demand are already feeling the pinch,” said K.K. Asharaf, Ernakulam Market Stall Owners Association.

The market receives up to 14 loads of supplies on Mondays, engaging as many lorries. He said that except for the prices of a few select items like beans and ginger, which have touched ₹100 per kg and ₹120 per kg respectively, an overall price rise hasn’t yet set in, though it seems not far away.

Chicken stall operators remain apprehensive that the fuel price hike may push up the price of chicken, which has only recently come down after a period of shortage in supply. “Prices had risen to ₹188 a kilogram before supply normalised with the onset of summer showers that eased the excessive heat adversely affecting production. It has now come down to ₹170. If fuel prices continue to rise, it may lead to a corresponding increase in operational costs, driving up prices again,” said O.S. Shajahan, Ernakulam district secretary, Kerala State Chicken Vendors Association.

The emergence of Chalakkudy as the main supply point for the State, considerably reducing dependence on Tamil Nadu, remains the sole relief.

Kerala Vyapari Vyavasayi Ekopana Samithi (KVVES) rues the overall rise in prices triggered by the fuel hike.

“Prices of select items, including plastic, have increased by 25% to 50%. The fluctuations caused by frequent hikes have made long-term supply agreements nearly impossible. Forget year-long agreements, we are not in a position to even provide supply quotations for a month,” said A.R. Dayanand, general secretary, Kakkanad chapter of KVVES.

Prices of petrol and diesel were hiked for the fourth time in a span of ten days on Monday (May 25, 2026) with the latest being at a comparatively steeper ₹2.7 to ₹2.8 per litre across the country and across all variants.  

Petrol and diesel prices per litre as on May 25, 2026

With the latest hike, the standalone prices of the two retail fuels have cumulatively increased about ₹7.5 per litre across four tranches since the first hike on May 15. 

Further, the price of petrol in Delhi breached the ₹100 per litre-mark Monday — a level that it had last scaled four years back in May 2022 coinciding with the Russian-Ukraine conflict.  

On Monday (May 25, 2026), price of petrol in Delhi rose ₹2.61 per litre to ₹102.12 per litre. Price of diesel increased ₹2.71 per litre to ₹95.20 per litre.  

Among the four metros, that is, Delhi, Mumbai, Kolkata and Chennai, price of petrol rose most sharply in Kolkata while Mumbai observed the sharpest increase in price of diesel.  

Kolkata woke up to a ₹2.87 per litre increase in price of petrol, making it now available at ₹113.51 per litre. Price of diesel in Kolkata increased ₹2.80 per litre to ₹99.82 per litre.  

On largely similar lines, price of petrol in Mumbai rose ₹2.72 per litre to ₹111.21 per litre while that of diesel increased ₹2.81 per litre to ₹97.83 per litre. 

Meanwhile, Chennai experienced a comparatively lower magnitude of hike though effective price levels were relatively similar.  

Price of petrol in Chennai increased ₹2.46 per litre to ₹107.77 per litre while price of diesel spurred ₹2.57 per litre to ₹99.55 per litre. 

India’s oil-marketing companies kept fuel prices steady amidst elevating crude oil prices for about three months before passing on some of the pressure starting May 15.  

The first in the series of hikes increased prices of the two retail fuels by ₹3 per litre. Thereafter, prices were hiked 90 paise per litre each in two separate tranches.

Thus, Monday’s (May 25, 2026) hike is the first major increase, that is, of more than ₹1 per litre, in the last ten days.

India’s crude oil basket until May 22 in the ongoing month has averaged $107.96 per barrel.

Further, the global benchmark brent crude futures (July) Monday morning fell about 4.8% to $98.59 per barrel amid cues of a peace deal between Iran and U.S. reversing prolonged stay at above $100 per barrel.

Prices of petrol and diesel were hiked for the fourth time in a span of 10 days, on Monday (May 25, 2026), this time by an average of ₹2.80 paise per litre across the country.

This brought the effective price of petrol in Delhi to ₹102.12/litre and that of diesel at ₹95.20/litre.

Petrol and diesel prices as on May 25, 2026

This was the fourth such increase this month following the ₹3 upward revision on May 15, 2026, and further 90 paise hikes on May 19, 2026, and on May 23, 2026 after four years.

With the latest revision, cumulative increases in petrol and diesel prices are almost ₹7.5 per litre since fuel rate revision resumed on May 15 after a prolonged freeze.

Oil-marketing companies raised the prices of petrol and diesel for the third time in eight days on Saturday (May 23, 2026). Prices were hiked by an average 90 paise per litre across all variants. This was the third such increase this month following the ₹3 upward revision on May 15, 2026, and a further 90 paise hike on May 19, 2026 after four years.

Starting May 23, petrol will be 87 paise more expensive in Delhi at ₹99.51 per litre in Delhi. Whilst, price of diesel spurred 91 paise to ₹92.49 for every litre.

Prices of both retail fuels across the country have cumulatively increased by₹4.8 per litre in three tranches since May 15.

More details to follow