Petrol, diesel prices will go up further, say experts. This is what they predict

The Rs 3 per litre increase in petrol and diesel prices in India is seen as a 'modest' hike by experts. They say more rounds of price increases could be on the way. By how much will petrol and diesel prices go up by? This is what experts predict.

After four years, India has increased the price of normal petrol and diesel. The Rs 3-per-litre hike came on Friday morning after India witnessed a miracle at petrol pumps for weeks amid the war in the Middle East. The big question — is the Rs 3 hike the first of many that consumers will see? In short, the answer is yes.

Experts consider the Rs 3/litre increase "modest" and see a further hike of at least Rs 11. They suggest a Rs 14–15 per litre hike for petrol and diesel as logical given how global crude prices have gone up due to the war in the Middle East and the double chokehold on the Strait of Hormuz.

"The modest hike in retail price of Rs 3/litre for petrol and diesel provides limited relief to the oil marketing companies," said Prashant Vasisht, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA.

For over two months now, India's oil marketing companies (OMCs) have been losing Rs 1,000 crore a day as crude rates soared, but pump prices remained frozen. Even as India conducted elections in four states and a Union Territory, the attempt might have been not to send across a message of foreboding.

Panic buying and long queues were reported at petrol pumps across several Indian cities amid fears of a steep fuel price hike.

"The Rs 3 hike is just the starting point. Fuel prices could eventually rise by Rs 20-25 in total over time. OMCs are losing around Rs 1,000 crore a day, and it will not be possible to absorb the losses for too long," Vineeth K, a Harvard graduate and partner at US-based consulting firm ZS, wrote in a post on X.

For a country like India, which imports over 85% of its energy requirements, remaining unaffected by the oil-gas supply disruptions was impossible.

Rate of a barrel of Brent crude is around $107.63 today. It traded at approximately $70 per barrel on February 1, 2026. It was on February 28 that the US and Israel launched airstrikes on Iran, killing its top leadership. The flames has since spread across the several petroleum-exporting countries like the UAE, Saudi Arabia and Qatar.

HOW MUCH WILL PETROL, DIESEL RATES GO UP BY IN INDIA?

Most countries, including the US and China, have increased motor fuel prices. Closer to home, Pakistan and Bangladesh too raised fuel prices. India, where the Centre intervenes in petrol and diesel pricing through the OMCs, had kept prices frozen till now. But the Rs 3 hike per litre isn't going to help the oil companies fully.

"ICRA estimates that at crude price of $105-110/barrel and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about Rs 500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike," said Vasisht.

"Accordingly, the oil marketing companies would need to relook at the retail prices in case elevated crude oil prices persist," said the ICRA expert.

Parimal Duddalwar, value investor and F&O trader, saw the Rs 3/litre fuel price hike as a timely near-term margin booster for OMCs.

"...The latest fuel price increase is expected to act as a near-term margin booster for OMCs, especially after a prolonged phase of suppressed marketing spreads," Duddalwar wrote on X.

Snipy, an Indian fintech platform focused on real-time trading tools and market intelligence, quoted an energy analyst, saying that the latest Rs 3 per litre fuel price hike is insufficient for full OMC recovery. The analyst noted that further hikes of around Rs 11 per litre are still needed, as Oil Marketing Companies continue to face deep under-recoveries with crude oil at approximately $110.

HIGHER PETROL, DIESEL PRICES A REFLECTION OF REALITY

The whole world has been impacted by the war in the Middle East. But for over two months, India mostly went about its business as usual.

It is true that India is economically better placed than dozens of other countries, but it would be foolish to expect that a war of this magnitude wouldn't cause disruptions in India.

"The fuel price hike was very important. The ground reality is that oil supply has become more expensive and uncertain," Rahul Ahluwalia, Founder-Director of the Foundation for Economic Development, told India Today Digital.

Not just the cost of petrol and diesel, prices of milk have gone up too. On Wednesday, Amul and Mother Dairy raised milk prices by Rs 2 per litre, which they said had partly to do with logistics costs.

Experts suggest that some price rise helps in adjusting to global realities, and helps avoid a blunt shock.

"It is important that prices should reflect reality, otherwise consumer behaviour will not adjust, and this distortion will cause more pain later in the form of shortages, fiscal crisis and lower standards of living for everyone," explained Ahluwalia.

One thing is clear, the Rs 3 rise in petrol and diesel prices is likely the first of the several that are to come in the weeks ahead. Even if there is a breakthrough in the Iran war and peace returns, the disrupted global oil infrastructure and the crude transportation ecosystem will take months to recover.

Indian OMCs can't keep bleeding, so, expecting some more hikes would be a practical outlook. But the government will have to be cautious even as it is being practical. Estimates by market experts suggest the cumulative increase could eventually be in the range of Rs 11-15 per litre more, depending on global oil prices and geopolitical developments.

Higher fuel prices will push up prices of everything because the cost of transporting items will go up. India will have to see how it helps shield its huge vulnerable population, including the poor and the migrant labourers, from the price shock.

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