State oil companies losing a thousand crore rupees daily
For the fourth time in as many weeks, Indian consumers have felt the weight of a distant conflict pressing down on their daily lives, as CNG prices in Delhi climbed to ₹83.09 per kilogram and fuel costs continued their steady ascent. The closure of the Strait of Hormuz — that narrow passage through which so much of the world's energy flows — has reminded India, once again, of how deeply its economy is tethered to geopolitical forces far beyond its borders. A nation that imports nine of every ten barrels of crude it consumes has little shelter from such storms, and the arithmetic of loss — ₹1,000 crore a day absorbed by state oil companies — could only hold for so long before ordinary citizens were asked to share the burden.
- Iran's closure of the Strait of Hormuz has created a genuine supply chokepoint, sending Brent crude toward the psychologically critical $100-per-barrel threshold and rattling energy markets across Asia.
- India's near-total dependence on crude imports has left it acutely exposed, with the rupee under pressure and the import bill swelling with each passing week of conflict.
- State oil companies quietly absorbed the shock for weeks, but daily losses of roughly ₹1,000 crore made that strategy unsustainable — and the costs have now begun flowing to consumers at the pump.
- CNG in parts of the National Capital Region has crossed ₹92 per kilogram, while petrol and diesel have risen nearly ₹7.5 per litre in a fortnight, squeezing household and transport budgets alike.
- With the West Asia conflict entering its third month and no resolution in sight, analysts see further hikes as near-certain unless crude stabilizes — a prospect that currently appears distant.
On Tuesday, Indraprastha Gas Limited raised CNG prices in New Delhi by two rupees per kilogram, pushing the rate to ₹83.09 — the fourth such increase in four weeks. Surrounding cities bore an even heavier load, with Ghaziabad and Greater Noida reaching ₹91.70 per kilogram and Ajmer climbing to ₹92.44. The day before, oil marketing companies had already raised petrol and diesel prices, bringing the cumulative increase over two weeks to nearly ₹7.5 per litre.
The source of the pressure was no mystery. Conflict in West Asia, which erupted in late February following strikes by the United States and Israel, had prompted Iran to close the Strait of Hormuz — a critical artery for global oil flows. For a country that imports roughly ninety percent of its crude, India had almost no buffer against the resulting price surge. The rupee came under strain, and the import bill grew heavier by the day.
For weeks, state-run oil companies had chosen to absorb the rising costs rather than pass them on, but the losses — estimated at around ₹1,000 crore per day — made that position untenable. When the dam finally broke, prices moved quickly. By Wednesday, Brent crude futures were trading at $97.32 per barrel, up more than one percent in early Asian trading, with analysts warning that a sustained breach of the $100 threshold would almost certainly trigger another round of hikes.
The question facing Indian consumers and policymakers alike was no longer whether further increases were coming, but how soon — and how steep.
The price of compressed natural gas climbed again in India's capital on Tuesday, marking the fourth increase in as many weeks. Indraprastha Gas Limited raised CNG rates by two rupees per kilogram, pushing the cost in New Delhi to 83.09 rupees per kilogram. In surrounding areas the burden fell even heavier: Ghaziabad and Greater Noida saw prices reach 91.70 rupees per kilogram, while Gurugram climbed to 88.12 and Ajmer to 92.44. The hikes did not stop at natural gas. A day earlier, oil marketing companies had already lifted petrol prices by 2.61 rupees per litre and diesel by 2.71 rupees per litre—a combined jump of nearly 7.5 rupees per litre over the preceding fourteen days.
The immediate cause was clear enough: global crude oil markets had become volatile and expensive, and India felt the tremor directly. The country imports roughly ninety percent of its crude oil from abroad, which means it has little insulation from the price swings that ripple through international energy markets. Since late February, when conflict erupted in West Asia, those swings have been severe and sustained. Iran's closure of the Strait of Hormuz following strikes by the United States and Israel created a genuine supply bottleneck. Oil that would normally flow through that waterway now had to find alternate routes, if it could move at all. The result was predictable: crude prices climbed, India's import bill swelled, and pressure mounted on the rupee.
For weeks, state-run oil companies had absorbed the shock themselves, keeping retail prices steady even as their costs rose. That strategy came at a staggering cost. The companies were losing approximately one thousand crore rupees—roughly 120 million dollars—every single day. That arithmetic could not hold indefinitely. Eventually, the losses forced their hand, and prices at the pump began to rise in earnest. Energy analysts watching the situation saw little reason for optimism. The war was now in its third month with no visible path toward resolution. If disruptions in the Strait of Hormuz persisted, crude was expected to remain above one hundred dollars per barrel. That threshold, if breached and sustained, would likely trigger further price increases at Indian fuel stations.
The volatility continued even as the week progressed. On Wednesday, with no signs of de-escalation in West Asia, benchmark Brent crude futures gained more than one percent during early Asian trading, climbing to 97.32 dollars per barrel. Policymakers and analysts were watching the same numbers and drawing the same conclusion: unless Brent crude stabilized below one hundred dollars per barrel for an extended period, Indian consumers should expect more hikes. The question was no longer whether prices would rise again, but when, and by how much.
Notable Quotes
Analysts and policymakers expect further price hikes unless Brent crude stabilises below $100 per barrel for a sustained period— Energy analysts and policymakers
The Hearth Conversation Another angle on the story
Why does a conflict in West Asia matter so much to someone buying gas in Delhi?
Because India doesn't pump enough oil of its own. We import ninety percent of what we need, and most of it travels through the Strait of Hormuz. When that waterway gets closed, the supply tightens and prices everywhere spike.
So the oil companies just have to pass the cost along to consumers?
They tried not to for weeks. They absorbed the losses themselves—about a thousand crore rupees a day. But that's not sustainable. Eventually you have to raise prices or go bankrupt.
Is there any scenario where prices stabilize?
Yes, if Brent crude stays below one hundred dollars per barrel for a sustained period. But right now the war shows no signs of ending, and the Strait remains closed. So analysts expect more hikes.
How much have prices already gone up?
CNG is up two rupees per kilogram four times in two weeks. Petrol and diesel combined have risen nearly seven and a half rupees per litre over the same period. It's compounding quickly.
What happens to ordinary people when fuel gets this expensive?
Everything becomes more expensive. Transportation costs rise, which gets passed to goods, which affects inflation. People with tight budgets feel it immediately.